Govt imposes MEP of $850/MT on onions to boost domestic supplies
The Dollar Business Bureau
In order to increase local supplies and to control rising prices, the Government on Thursday levied a minimum export price (MEP) of $850 per metric tonne (MT) on onions till the end of this year.
Minimum Export Price is the minimum rate below which exports are not allowed. In December 2015, the Government has scrapped the MEP of onion.
“Export of all varieties of onions will be allowed only on Letter of Credit (LC) subject to a minimum export price (MEP) of $850 FOB per metric tonne till December 31, 2017, Directorate General of Foreign Trade (DGFT) said in a notification (No.39/2015-2020), dated November 23.
The retail prices of onion have surged to Rs.50-65 per kg in most of the cities, due to tight local supplies.
The Government has also asked state-run Metals and Minerals Trading Corporation of India (MMTC) for importing 2,000 tonnes of onion, whereas other agencies such as Small Farmers' Agri Business Consortium (SFAC) and National Agricultural Cooperative Marketing Federation of India (Nafed) to source onions from the domestic market for supplying in consuming areas.
The supply of onions got exhausted in the domestic market as huge quantity of exports in the initial four months of this fiscal. India exported around 1.2 million tonnes of onions in April-July period this year, an increase of 56% over a year-ago period.
The country has exported 24,15,757 MT of fresh onion worth of $464 million during the year 2016-17, according to APEDA.
In addition, it is expected that onion production in the new 2017-18 kharif season would be lower due to decline in acreage.
Bihar, Gujarat, Karnataka, Maharashtra and Madhya Pradesh are the major onion producers.