New Delhi: In an effort to tame rising onion prices and increase domestic supplies, the centre on Thursday imposed a minimum export price (MEP) of $850 per tonne.

According to a notification issued by the Directorate General of Foreign Trade, export of all varieties of onions will be permitted only at a minimum price of $850 per tonne till the end of the year.

The move to bring back MEP on onions follows a decision earlier this month to import onions and initiate local procurement to moderate prices.

The retail price of onions is currently around Rs50 per kg in Delhi, substantially higher than the Rs27 per kg in early August.

Rising vegetable prices are a cause of concern for the government as India’s retail inflation quickened to 3.6% in October, its fastest pace in seven months. During October, vegetable prices rose sharply to 7.5% from 3.9% the month before.

India’s kharif (summer) crop of onions started arriving in markets in October in producing states like Andhra Pradesh, Karnataka, Maharashtra, Gujarat, Madhya Pradesh and Rajasthan.

However, the crop size is expected to be smaller due to lower sowing by farmers. According to the agriculture ministry, planting of (2017-18) kharif onions is 29% lowered than last year.

Data from the National Horticulture Board shows that arrival of onions in major wholesale markets in October fell 17% compared to the year before.

Domestic supplies are also tight as India exported 0.79 million tonnes of onions between April and August this year, show numbers from the Agricultural and Processed Food Products Export Development Authority.

In 2016-17, India exported 2.4 million tonnes of fresh onions, about a tenth of its estimated production of 21.7 million tonnes during the year.

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