Inter-ministerial group on onions to consider floor price, if needed

With onion prices starting to rise across States, the government is keeping a close watch on exports in order to intervene at the first sign of trouble.

The inter-ministerial group on onions, comprising officials from the ministries of Commerce, Agriculture and Consumer Affairs and Public Distribution, which met recently, has not found any ground yet to impose a Minimum Export Price (MEP), but the situation may change if prices rise further.

“We are looking at onion export figures. It is not very alarming. Last month, it was about 80,000 tonnes which on a month-on-month comparison is not very high. But, if there is a requirement for MEP, it will be considered,” a government official told BusinessLine.

The official added that the IMG had not yet received any suggestions for imposing MEP.

Onion prices have recently started rising, following months of slump, largely due to the Madhya Pradesh government’s decision to procure 2 lakh tonnes of the bulb and also the excessive rainfall in Gujarat affecting supplies from the State.

At the Lasalgaon market in Maharashtra, prices have doubled from ₹700 to ₹1,400 a quintal in about ten days. This is mainly because demand from the State has increased due to fall in availability in MP and rain-affected Gujarat and Rajasthan.

While the prices are likely to be corrected in September once the new crop arrives in the market, the government cannot afford to be negligent on exports.

“Onions are not like tomatoes where prices do not have much correlation with exports. Since about 8-10 per cent of our onions get exported, domestic prices can be influenced by encouraging or checking exports,” the official said.

The Centre had imposed MEP on onions in 2014 to discourage exports and check steep rise in prices and had started lowering it the following year when the situation improved. The MEP was completely withdrawn in December 2015 following which exports of onions from the country increased substantially.

Exports in value terms rose 25 per cent to $472.73 million in 2015-16 compared to $376.56 million in 2014-15. In 2016-17 too, the levels reached the previous year were mostly maintained with shipments valued at $462.94 million.

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