Minimum export price on onion likely to be hiked from $850/tonne to $1000/tonne

New Delhi: The government may hike the minimum export price (MEP) of onion from USD 850 per tonne to USD 1000 per tonne to increase domestic supplies and check rising prices.

MEP is the minimum rate below which exports are not allowed. According to sources the government may announce this in a cabinet meeting soon.

Retail onion prices, which had shot up to Rs 80-85 per kg in most cities, have come under pressure due to tight domestic supplies.

Although the prices of the kitchen staple has slightly come down, it still continues to strain the household budget.

The government has asked state-run MMTC to import 2,000 tonnes of onion, while other agencies Nafed and SFAC to buy onions locally and supply in consuming areas.

About 40 percent of the country's total onion crop is produced in the kharif season, and the rest during the rabi season. The kharif crop, however, cannot be stored.

Maharashtra, Karnataka, Madhya Pradesh, Bihar and Gujarat are the major onion producing states.

As per the trade data (as on 1st week of December), onion and tomato prices were ruling in the range of Rs 70-80 per kg in the retail market of the national capital. A similar rise in prices seen in other major cities as well.

The government had in November, imposed a minimum export price (MEP) of USD 850 per tonne on onion.

Concerned over the rise in onion prices, Consumer Affairs Minister Ram Vilas Paswan in August had sought that MEP be imposed on its exports by the commerce ministry. He also sought the removal of sops on export of the kitchen staple.