The imposition of minimum export price (MEP) of $300 per tonne will help arrest the rise in prices, the government said Wednesday.
"Imposition of MEP on onion export is expected to help in arresting the rise in prices and stabilising the onion prices in the domestic markets and balance the interests of both farmers and consumers," the ministry of commerce and industry said in a statement.
An Inter-Ministerial Committee has decided to impose a minimum export price of $300 per tonne on onion, in view of the recent spike in prices. Onion price has jumped by almost 50 percent in some parts of the country in recent weeks largely due to hoardings on fear of weak monsoon.
According to official data released earlier this week, wholesale price-based inflation rose to five month high of 6.01 percent in May due to high fuel and food prices.
In their meeting held on June 13, the Inter-Ministerial Committee observed that the model rates in the producing mandis have shown increase during second week of June and the retail and wholesale prices in four Metropolitan cities have also shown steady increase as compared to prices prevailing on May 1, the commerce and industry ministry statement said.
"The Committee as such observed that there is an urgent need to calibrate exports in order to augment domestic supplies so that domestic prices do not overshoot in near future," it said.