Minimum export price of onion slashed by $30

The minimum export price (MEP) of onion has been revised downwards by $30 a tonne to $225 with effect from May 1 to provide support to domestic prices.

This is the second consecutive downward revision of the MEP. In April, the price was lowered by $80 a tonne to $255.

In February, retail onion prices had surged from Rs 10 to Rs 24 a kg on account of rising exports.

This forced the National Agricultural Cooperative Marketing Federation (Nafed) to raise the MEP by $25 a tonne to make exports less lucrative. Following this, prices slipped to Rs 12-14 a kg.

Domestic wholesale onion prices had crashed from Rs 1,100 a quintal in February to Rs 450 now, while retail prices came down from Rs 24 to Rs 8 over the same period.

"Any further fall in retail prices will hamper the interests of onion traders as well as growers. The lowering of MEP will encourage exports and provide support to domestic prices," said Alok Ranjan, managing director of the federation.

The federation revises the MEP monthly and no exports can take place below this price.

Onion exports jumped by about 44 per cent in 2006-07 to 11.26 lakh tonnes against 7.78 lakh tonnes in 2005-06. The 2006-07 exports were valued at Rs 1,070 crore.

In the current year so far, about 70,000 tonnes was exported on good demand from Dubai, Malaysia, Sri Lanka and Bangladesh, added Ranjan.

According to the National Horticultural Research and Development Foundation, domestic onion production in 2006-07 was 66.68 lakh tonnes, up about 7 per cent from 62.23 lakh tonnes in 2005-06.