Onion export price hiked by $100/tn

Unwilling to take additional pressure of the rising prices of essential commodities at a time when it's facing the Left parties' opposition to the Indo-US civil nuclear deal, the government today raised the minimum export price (MEP) of onion by a record 29 per cent or $100 a tonne.

"We have raised the MEP by $100 to a record $445 a tonne with effect from today since the domestic rates are high. The move will discourage exports," said Alok Ranjan, the managing director of the National Agricultural Cooperative Marketing Federation (Nafed).

The Nafed revises the MEP, below which no exports can take place, every month.

It is the fifth hike since January and the second this month. Last August, the MEP was $165 per tonne.

The domestic retail price of onion is Rs 20 per kg as a result of a sharp rise in exports over the past week because of a dip in exports from Pakistan due to heavy rains. As a result, the pressure of demand from the Gulf countries has shifted to India.

Before this, the largest increase in MEP, $80 per tonne, was in February, when domestic prices were around Rs 24 a kg. However, this year's onion exports at 3.07 lakh tonnes (to date) were significantly lower than 5.03 lakh tonne for the corresponding period last year, Ranjan said.

Moreover, with sowing in the kharif season estimated to be 20 per cent higher than last year, there appears to be no supply problem.

Also, early arrivals in the wholesale markets of Rajasthan and Karnataka have been selling as low as Rs 700-800 per quintal, suggesting that the prices will soften.