New Delhi: The government Wednesday lowered the minimum export price of onion by USD 100 a tonne to USD 150 per tonne to boost outbound shipments which have declined.
"The minimum export price (MEP) of all varieties of onions except Bangalore Rose onions and Krishnapuram onions will be USD 150 per tonne," a notification by the Directorate General of Foreign Trade (DGFT) said here.
The export price of Bangalore Rose and Krishnapuram onions have also been reduced marginally to USD 250 a tonne from USD 300/tonne earlier, the notification added.
Onion growers and traders have been demanding a slash in the export price to keep the commodity competitive in the international market.
Onion exports from India declined by nearly 23 percent in the first nine months of the current financial year as compared to last year's, mainly due to high price of shipment at USD 250 per tonne.
China and Egypt are dominating the international market by selling bulb at less than USD 200 a tonne, trade sources said. After lifting the ban on onion exports in October last year, the government had kept its MEP initially at a high USD 450 a tonne.
It was first reduced to USD 350 a tonne and then to USD 250 a tonne in November, 2011, to make it competitive in the international market.
But, lowering of onion export prices to USD 250 a tonne failed to perk up its outbound shipment as the kitchen staple from China and Egypt are selling at less than USD 200 a tonne.
Except for Sri Lanka and Gulf, the volume of export of Indian onion has dropped to other traditional destinations-- Bangladesh, Russia, Europe and Mauritius, traders said.
Onion growers in Nashik in Maharashtra, who were earlier upbeat over bumper production of crop are a depressed lot because of lesser quantity of the bulb going abroad.
Nashik is the hub of onion production in the country.
Due to bumper production of onion in 2011,the domestic markets are glutted with the root vegetable.
Dilip Rao Bankar, Chairman of APMC Pimpalgaon, wants MEP to be done away with completely.