Mumbai: The government on Friday cut the minimum price at which onions can be exported from the country by $40 (Rs1,760) a tonne, aligning it with the fall in local prices and giving a thrust to exports.
The National Agricultural Cooperative Marketing Federation of India (Nafed), a government agency, had in February raised the minimum export price (MEP) of onions by about 30% across regions in the country, to discourage exports amid surging local prices.
“Now, arrivals have improved and prices have fallen across the country. So, we decided to reduce the minimum export price,” a senior Nafed official said.
The new export prices, to come into effect on Sunday, differ from region to region.
Onion prices had shot up in India in early 2007 on lower arrivals and booming export demand from neighbouring countries. However, the government’s export control and improving arrivals had brought down the prices again.
Wholesale prices in India’s largest onion trading hub, Lasalgaon in Maharashtra state, have eased to Rs500 a quintal, from Rs1,500 in February. Retail prices have fallen from a peak of Rs25 a kg to about Rs9 in Mumbai.
“There is no shortfall of onion and it was necessary to cut the MEP,” Nafed vice-chairman C.B. Holkar said.
India, the world’s second- largest producer of onions, is expected to have exported an all-time record of 1.1 million tonnes (mt) in the year to March 2007, cashing in on the output shortfall in neighbouring countries, especially Pakistan.
However, the output is expected to fall to 5.5mt in the current fiscal year, from 6.2mt last year, as heavy rains have washed out part of the crop in western and southern India.