Centre curbs onion export as prices double | Latest News India - Hindustan Times
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Centre curbs onion export as prices double

Oct 28, 2023 09:42 PM IST

A minimum export price (MEP) of $800 per tonne on a freight-on-board basis will be applicable on onion effective October 29 and remain in force until December 31

The Union government on Saturday imposed curbs on onion exports, setting a floor price on overseas shipments of the vegetable amid fresh pressure on supplies and prices.

Retail rates of onion have nearly doubled in a week in several cities, with the vegetable selling between <span class='webrupee'>₹</span>50-60 a kg in Delhi, up from <span class='webrupee'>₹</span>25-30 a kg (Representative Image)
Retail rates of onion have nearly doubled in a week in several cities, with the vegetable selling between 50-60 a kg in Delhi, up from 25-30 a kg (Representative Image)

Retail rates have nearly doubled in a week in several cities, with the vegetable selling between 50-60 a kg in Delhi, up from 25-30 a kg. Prices could jump further if supplies remain low during an ongoing festive season when demand for many food commodities goes up.

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A minimum export price (MEP) of $800 per tonne on a freight-on-board basis will be applicable on the item effective October 29 and remain in force until December 31, a notification by the directorate general of foreign trade said. A premium variety of the bulb has been exempted from the condition for exports.

MEP is a price threshold below which traders cannot sell to global buyers. It is a measure designed to limit cheap exports and boost domestic availability, thereby helping to cool prices.

The government on Saturday said it would procure an additional 200,000 tonne of onions for its buffer stock, for which 500,000 tonne had already been bought. An official said the government would continue to sell onions in about 16 cities where prices were ruling high.

The restrictions on onion export comes ahead of elections in five states and a general election next year, in which Prime Minster Narendra Modi will seek a rare third term in office. Onion is a base ingredient of most Indian dishes and consumers are sensitive to any rise in its prices.

Supplies have dwindled in markets due to a delay in harvest and a smaller crop following a patchy summer monsoon. “The measure has been taken to maintain sufficient availability of onion to domestic consumers at affordable prices as the quantity of stored rabi 2023 onion is declining by curbing the quantity of onion exports,” a statement said.

In August, the government had to sell onions at subsidised rates from its own stocks after prices spiraled to a decade’s high, hitting households.

The department of consumer affairs had directed NCCF and NAFED, two state-backed food agencies, to buy 100,000 tonne each to achieve the additional procurement target, alongside “calibrated disposal of the procured stocks in major consumption centres”.

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  • ABOUT THE AUTHOR
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    Zia Haq reports on public policy, economy and agriculture. Particularly interested in development economics and growth theories.

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