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The government today cut minimum export price (MEP) of onions by more than half to $350 (Rs 21,812) per tonnes from $800 (Rs 49,856)a tonne with immediate effect to help stabilize the falling domestic prices.
Ironically, surging onion prices were stated to be one of the prime reasons for a rout of the Congress in assembly elections, particularly Delhi.
The decision was taken by the inter-ministerial committee (IMC), chaired by joint secretary in the commerce department.
"(Onion) arrivals have shown marked improvement and on the expectation of better crop prospects and the sharp decline in the wholesale modal prices in production mandis of Maharashtra and other places, it has now been decided by the Government to slash the MEP to USD 350 meteric tonnes," an official statement said here.
The governnment had earlier this month slashed MEP to $800 a tonne from $1,150 a tonne.
The statement said today's move "will not only help in arresting the sharp decline in prices realised by the farmers but would also make Indian export of onions more competitive in the international markets."
In quite contrast, the government had imposed a floor export price of $650 a tonne on August 14 and increased it to $900 in September and $1,150 in November.
Wholesale price index-based inflation have been at over 100% for six months till November. It stood as high as 336% in September and then came down to 278.21% in October and further to 190.34% in November.
Rising prices of essential commodities, particularly onions, has caused a crushing defeat of the Congress in the recent assembly elections.
However, now prices have started crashing from late November. While average all-India retail prices of onions declined to Rs 36.56 in December so far from Rs 53.94, the wholesale price fell to Rs 30.26 a kg (Rs 3026 a quintal) from Rs 46.08 a kg (Rs 4608 a quintal).
Prices crashed in Nashik and parts of Maharashtra much more severely.
