New Delhi: The government Wednesday reduced the minimum export price (MEP) of onion to USD 350 per tonne following improvement in domestic supply situation and softening of prices.
In June this year, the MEP on onion was re-introduced at USD 300 per tonne which was further raised to USD 500 per tonne in July this years as prices had continued to move upwards.
"The MEP of onion has been brought down to USD 350 per tonne as its availability has increased," Telecom and Law Minister Ravi Shanker Prasad told reporters here after a Cabinet meeting.
"When our government came in power we had increased the MEP of onion to USD 500 per tonne from USD 350 per tonne to make the exports less competitive," the Minister said.
Onion prices were rising due to speculation amid anticipation of below normal monsoon despite sufficient supply in the country.
During June, the wholesale price of onion at Lasalgoan in Maharashtra -- Asia's largest onion market -- had risen by about 80 percent to Rs 18.50 per kg. At present, the rates are hovering around Rs 13-14 per kg at Lasalgoan.
Onion production is estimated to have risen to 192 lakh tonnes during 2013-14 crop year (July-June), from 168 lakh tonne in 2012?13. Exports meanwhile fell to 13.58 lakh tonnes last fiscal from 18.22 lakh tonnes in 2012-13.
The domestic demand during the lean period from June to November is met through stored rabi (winter) and fresh kharif (summer) produce.
First Published: Wednesday, August 20, 2014, 23:29