Government Imposes Minimum Export Price of USD 800 Per Tonne on Onion Exports

The government on Saturday imposed a minimum export price (MEP) of USD 800 per tonne on onion exports till December 31 this year. This decision aims to increase the availability of onions in the domestic market and contain rising prices. The MEP will come into effect from October 29.

Additional Procurement of Onions for Buffer Stock

In addition to imposing the MEP, the government has also announced the procurement of an additional 2 lakh tonnes of onions for the buffer stock. This is over and above the 5 lakh tonnes already procured. The MEP is applicable to all varieties of onions except Bangalore Rose and Krishnapuram onions, as well as cut, sliced, or broken in powder forms.

Export Regulations and Exceptions

While onion exports are generally free, the MEP of USD 800 FOB (free on board) per tonne will be imposed until December 31, 2023. However, certain onion consignments will be allowed to be exported without MEP. These include consignments that have been handed over to the Customs before this notification and are registered in their system. Onion consignments that have entered the Customs station for exportation before this notification and are registered in the electronic systems of the concerned custodian of the Customs station with verifiable evidence of date and time stamping of these commodities having entered the customs station prior to the issuance of this notification are also permitted to be exported. It is important to note that export duty will not be refunded if it has already been paid.

Current Market Situation and Government Intervention

In the retail market of the national capital, onion prices have risen further, ranging from Rs 65-80 per kg due to lower supply. To provide relief to consumers, the Centre decided to step up the sale of buffer onion at a subsidized rate of Rs 25 per kg in retail markets. According to the Department of Consumer Affairs data, on Saturday the all-India average retail price of onion is Rs 45 per kg, but the maximum price is Rs 80 per kg. In Delhi, the average price is ruling at Rs 75 per kg.

Reasons for Price Increase and Government Measures

The delay in kharif onion sowing due to weather reasons has resulted in less coverage and late arrival of the crop. As a result, there is a tight supply situation, leading to price increases in both wholesale and retail markets. The government has taken steps to address this issue by doubling the buffer onion stock for the current year, which should improve domestic availability and check prices in the coming days.

The government's decision to impose a minimum export price on onions and increase the buffer stock aims to address the rising prices and ensure sufficient availability of onions for domestic consumers. These measures should help stabilize the market and provide relief to consumers.