Govt reduces onion export price to boost overseas sale

Govt reduces onion export price to boost overseas sale

New Delhi: With onion prices softening in the domestic market, agricultural cooperative National Agricultural Cooperative Marketing Federation of India Ltd (Nafed) has drastically cut the minimum export price (MEP) of the edible bulb to $250 (Rs9,925) per tonne from $425 a tonne for December to boost overseas sales.

“We have reduced the MEP of onion by $175 a tonne," said Nafed managing director Alok Ranjan, adding that the average MEP now stood at $250 per tonne.

Nafed and 12 other agencies issue no-objection certificates for onion exports and fix MEP every month for various overseas destinations.

MEP was reduced by $70 a tonne on 20 November. The revision was done in the middle of the month as MEP was kept unchanged last month due to Diwali.

Ranjan attributed a sharp cut in MEP for onion to the drastic fall in domestic prices, which have even led to protest by farmers in some parts of Maharashtra and Karnataka. “Domestic price has fallen drastically. Wholesale price in Nashik has declined to about Rs500 per quintal," he said.

Ranjan said the reduction in MEP would help increase the onion export. “We have lost the export market," he said. The export price for Bangladesh has, however, been cut only by $80 to $350 per tonne, another Nafed official said.

Prices of the politically sensitive commodity have dipped in the onion belts of Maharashtra and other states. In Maharashtra’s Lasalgaon wholesale market, prices slumped to Rs709 per quintal on 30 November from Rs1,421 per quintal at the beginning of the previous month.

In Nashik, prices eased to Rs725 per quintal from Rs1,300 per quintal, while in Pimpalgaon they dropped to Rs621 a quintal from Rs1,129. In New Delhi, onion was being sold at Rs13 per kg at a Mother Dairy retail outlet, while the bulb was available at Rs12-14 per kg in neighbourhood markets on Saturday. However, traders said a cut in MEP was necessary as exports of onion fell substantially in November.

The export of onion declined by 45% to 438,000 tonnes during April-November period of the current fiscal as against 802,000 tonnes in the year-ago period, according to the Nashik-based National Horticultural Research and Development Foundation.

The dip in export was due to very poor shipment in October and November, a Mumbai-based onion exporter said. Onion export fell to 30,714 tonnes last month against 108,000 tonnes during November 2006.