Higher MEP on onion likely to curb exports

The Centre is mulling over reimposing a minimum export price (MEP) of $700-800 per tonne on onion to curb exports and check local prices, a government source said.

MEP is the minimum rate below which export is not allowed. Onion MEP was scrapped in December 2015.

In a meeting called by the commerce ministry, the MEP issue was discussed in detail with exporters and other stakeholders besides officials of the consumer affairs ministry.

“In the meeting, it has been decided to impose the MEP to restrict onion exports and control spiralling domestic prices,” the government source said.

The export floor price has not yet been decided. It could be between $700 and $800 per tonne. A final notification in this regard will be issued soon, the source added.

Concerned over the rise in onion prices, Consumer Affairs Minister Ram Vilas Paswan in August had sought the commerce ministry to fix MEP of onion at $450/tonne and remove export sops to restrict exports.

Retail onion prices, which have shot up to ~50-65 per kg in most cities at present, have come under pressure due to tight domestic supplies.

Supplies got exhausted as large quantity of exports were undertaken in the first four months of this fiscal. The country exported 1.2 million tonnes in April-July of this fiscal, up by 56 per cent from the year-ago period.

Also, the new 2017-18 kharif crop — which is being harvested — is expected to be less owing to fall in acreage.

Recently, a senior consumer affairs ministry official had said that the new kharif crop is likely to be lower by 10 per cent as area sown is less by 30 per cent.

It may be noted that 40 per cent 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 major onion-producing states.

The export floor price has not yet been decided. It could be between $700 and $800 per tonne