Onion export rate hiked, govt says prices to ease 2-3 weeks

To curb rising onion prices, the government Thursday hiked the minimum export price (MEP) of the vegetable to USD 900 per tonne.

Last Updated: Sep 19, 2013, 21:45 PM IST

New Delhi: Worried over rising onion price, the government Thursday hiked the benchmark price for its exports by 40 percent to USD 900 per tonne for augmenting domestic supply of the vegetable, even as Agriculture Minister Sharad Pawar said rates would ease in the next 2-3 weeks.

Notwithstanding onion prices skyrocketing, Food and Consumer Affairs Minister K V Thomas ruled out the possibility of declaring onion as an essential commodity, while Pawar, who is also the NCP Chief, said his party was not responsible for hoarding onion in Maharashtra.

The decision to raise the minimum export price (MEP) to USD 900 per tonne from USD 650 per tonne comes in the backdrop of retail prices soaring to Rs 70-80/kg, after dropping to Rs 50-55 per kg a week ago from the same high level.

"Exports of all varieties of onions...Will be subject to an MEP of USD 900 per tonne," the Commerce Ministry said.

After a fresh MEP was imposed on exports on August 14, exports in the same month came down to 29,000 tonnes from over a 1 lakh tonnes in the previous month.

When asked about high onion prices, Pawar told PTI: "After talking to farmers and traders, my own assessment is that arrival of new kharif crop will increase substantially in next two-three weeks and prices will come down."

He stated domestic supply would improve as imports have started while exports have fallen.

Asked about reports that blamed NCP for hoarding onions in Maharashtra, Pawar said: "How can NCP be responsible for hoarding? It is a foolish statement. NCP people are elected on the agriculture produce marketing committee, which has the job of looking into arrivals and auctioning."

The Centre has asked states to crack down on speculators and hoarders to check prise rise, but state governments could do little as the commodity is not under the purview of the Essential Commodity Act, a senior government official said.

Asked if the Centre is mulling placing onion back in the list of items covered under the Essential Commodities Act: Thomas said: "No plans to include onion in this category." States have other powers and influence to crack down on hoarders and speculators, he added.