Onion: India sets minimum price to cut export

The Indian government has set the minimum export price (MEP) of onion at $850 a tonne to curb its shipments and help bring down soaring prices in the domestic market.

Onion prices across India have risen to about Rs 40-50 a kg in the last few days.

The MEP is the price below which no exports are allowed.

The decision will have an impact on the Bangladesh market, as it imports a significant amount of onion from India.

“The government has decided that the export of all varieties of onions shall be permitted only on letter of credit subject to minimum export price of $850 per tonne until further orders,” the consumer affairs, food and public distribution ministry said in a statement.

A notification to this effect was issued yesterday by the Directorate General of Foreign Trade, Department of Commerce and Ministry of Commerce and Industries, it added.

The Indian government last month warned of strict action against hoarding of onion amid supply disruption fears due to floods in parts of major growing states -- Maharashtra and Karnataka.

It had decided to cap the retail price of onion at Rs 23.90 a kg for grade A variety of onion.

On an average, India exports 1.5 million tonnes of onion a year and produces around 17-18 million tonnes a year.