Onion Export: Government gives big relief to onion farmers, ban on export lifted; will the price rise?

Basmati Export: The price of onion has been rising for the past one month. Now the government has removed the minimum export price (MEP) on onion. In such a situation, some people believe that the price of onion may rise in the coming time.

Onion Price: The government has removed the limit on the minimum export price (MEP) of onion and basmati rice with the aim of promoting exports and increasing the income of farmers. The government has taken this decision as the assembly elections in Maharashtra and Haryana, which are important states in terms of agricultural activities, are approaching. Haryana is one of the major producers of basmati rice, while Maharashtra is the leading onion producing state. The minimum export price on onion was fixed at $ 550 per tonne.

APEDA requested to take steps to implement the decision

The Directorate General of Foreign Trade (DGFT) issued a notification and removed it with immediate effect. Similarly, the Department of Commerce has decided to remove the existing minimum export price (MEP) of $ 950 per tonne for issuing Registration-cum-Allotment Certificate (RCAC) for the export of Basmati rice. Commerce and Industry Minister Piyush Goyal said that this step will help in export promotion and farmers' income. APEDA (Agricultural and Processed Food Products Export Development Authority) has been requested to take immediate steps to implement this decision.

Basmati export price was reduced in early October

APEDA will keep an eye on any export contract for Basmati exports at an unrealistic price. The government had reduced the minimum price for export of Basmati rice from $ 1,200 per tonne to $ 950 per tonne in early October last year. This was done due to concerns about affecting exports due to high prices. On August 27, 2023, the government had decided not to allow the export of Basmati rice at a price less than US $ 1,200 per tonne to curb illegal export of white non-Basmati rice under the guise of premium Basmati rice.

All India average price of onion is Rs 50.83 per kg

India's total export of Basmati rice in 2022-23 stood at $ 4.8 billion in terms of value, while in terms of quantity it was 45.6 lakh tonnes. Meanwhile, the Directorate General of Foreign Trade (DGFT) said in a notification removing the minimum price limit on onion exports, "The condition of minimum export price (MEP) on export of onion has been removed with immediate effect and till further orders." The decision to remove MEP on onion has been taken despite the high retail prices of this major kitchen food item. According to data compiled by the Department of Consumer Affairs, the all-India average price of onion was Rs 50.83 per kg, while the model price is Rs 50 per kg.

The minimum price of onion is Rs 28 per kg.

The maximum price of onion is Rs 83 per kg and the minimum price is Rs 28 per kg. On September 5, the Center started selling onions at a subsidized rate of Rs 35 per kg to provide relief to customers in Delhi and Mumbai from the rising price of onion. NCCF and NAFED started retail sales through their stores and mobile vans. The government has maintained a buffer stock of 4.7 lakh tonnes of onion. Consumer Affairs Secretary Nidhi Khare said that the outlook for onion availability and prices in the coming months remains positive. The area under kharif sowing has increased to 2.9 lakh hectares till last month, from 1.94 lakh hectares a year ago. About 38 lakh tonnes of onion is reported to be in stock with farmers and traders.

Will the price not increase?

The price of onion in Delhi's retail market is currently around Rs 60 per kilo. After the ban on onion export is lifted, no increase in its retail price is expected. The reason for this is that the government has a buffer stock of 4.7 lakh tonnes of onion. In case of any increase in price, the government will bring down the price by selling it in the open market. Apart from this, the price is also expected to remain normal due to the expectation of increase in onion crop production in the coming season. It is being told that about 38 lakh tonnes of onion stock remains with farmers and traders.