PUNE: The central government on Friday slashed the minimum export price (MEP) of onion to $225 for all destinations. This is expected to boost onion exports and support the falling price of the commodity in the domestic market.
The MEP for onions was raised in November 2009 following a country-wide spurt in the prices of the commodity due to the floods in southern India. The MEP, which was around $200 in April 2009, was around $550 in February 2010.
Now, from March 1, the MEP will be $225. “The onion prices in the producing markets have declined to Rs 700 per quintal. Hence, it was necessary to boost exports in order to prevent any further decline in domestic onion prices,” said Hari Prasad Sharma, assistant director, National Horticulture Development and Research Foundation (NHRDF), Nashik.
The high MEP had acted as a deterrent to exports which fell sharply in the three month period from November 2009- January 2010. According to the figures of Agricultural and Processed Food Export Development Authority (APFEDA), the country exported 1.5 lakh tonnes of onions in February 2010, as against 1.69 lakh tonne exports in February 2009 and 2.5 lakh tonnes in March 2009.
With the reduction in MEP, onion exports in March 2010 are expected to be 2 lakh tonnes.
Despite low onion exports after November, total exports in the period from April 2009 to January 2010 are marginally higher as compared to the exports during the comparable period of previous year.
Source : The Economic Times