India announced on Friday night that it has imposed a Minimum Export Price (MEP) of USD 850 per tonne of onions to curb its shipments and help bring down soaring prices in domestic markets. Onion prices across India have risen to about Rs 40-50 per kg in the last few days back. The MEP is the price below which no exports are allowed.
The “government has decided that the export of all varieties of onions…..shall be permitted only on Letter of Credit (LC) subject to Minimum Export Price (MEP) of US $ 850 Freight On Board, per metric tonne until further orders,” the Ministry of Consumer Affairs, Food and Public Distribution said in a statement.
A notification to this effect has been issued by the Directorate General of Foreign Trade, Department of Commerce, Ministry of Commerce and Industries dated 13th September, 2019, it added. "Export of all varieties of onions...will be allowed only on letter of credit subject to a minimum export price of USD 850 FOB (freight on board) per metric ton till further orders," the Directorate General of Foreign Trade (DGFT) notification said separately.
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 been decided to cap the retail price of onion at Rs 23.90 per kg for grade A variety of onions.
India’s retail inflation inched up marginally to 3.21 per cent in August from 3.15 per cent in July, mainly due to costlier food items. India exports on an average 1.5 million tonnes of onions a year and produces around 17-18 million tonnes of onion per year.