Govt Lifts Minimum Export Price On Onions To Boost Exports

This decision by the Centre allows farmers to sell their produce overseas at more competitive rates

In a move aimed at benefiting Indian farmers amid a global surplus, the government on Friday scrapped the minimum export price (MEP) for onions, which had been previously set at $550 per tonne. This decision allows farmers to sell their produce overseas at more competitive rates.

The Directorate General of Foreign Trade (DGFT) issued a notification announcing the removal of the MEP with immediate effect. The policy change comes ahead of assembly elections in Maharashtra, one of India’s key onion-producing states, and is expected to promote increased exports of the commodity.

"The Minimum Export Price (MEP) condition on the export of onions is removed with immediate effect and until further orders," the DGFT said in the notification.

Last week, onion prices surged due to a shortage in supply caused by reduced harvests and adverse weather. Currently, onions are priced at an average of Rs 45 per kg in the retail market, significantly higher than the Rs 31 per kg rate from the same time last year.

This sharp increase has impacted major cities, including Delhi, where prices have jumped over 25 per cent, reaching Rs 50 per kg. According to news reports, onions were sold for Rs 40-45 per kg in Azadpur Sabzi Mandi on Monday, while retail prices soared to Rs 70 per kg.

In Maharashtra, home to India's largest onion trading hub, prices in the Lasalgaon wholesale market have risen by 30 per cent compared to the previous month.

Several factors contributed to the price hike. The lower-than-expected rabi crop, which is planted in December-January and harvested after March, accounts for about three-quarters of India's total onion production.

Kharif crop sowing this year is well below average, with only 1.54 lakh hectares sown compared to 2.85 lakh hectares last year.

Many Hindus in North India refrain from consuming onions during the Shravan month, leading to a spike in demand once the month ends. Anticipating further price increases, traders are stockpiling onions, exacerbating the supply shortage.