New Delhi: The government has slashed the minimum export price (MEP) on onions to USD 400 per tonne, from USD 700 earlier, a move that is expected to encourage out-bound shipments of the commodity.
"MEP for export of all varieties of onions... is revised from USD 700 FOB (freight on board) per tonne to USD 400 per
tonne," the Directorate General of Foreign Trade (DGFT) said in a notification today.
MEP is the rate below which no traders are allowed to export. The rise in MEP restricts exports and improves domestic supply.
In August, the government had hiked onion MEP to USD 700 per tonne, from USD 425, as prices at both wholesale and retail levels skyrocketed on lower output due to unseasonal rains.
However, earlier this week, the Maharashtra government had asked the Centre to scrap MEP for onions to help boost overseas shipments after wholesale prices of the bulb went down to the Rs 10 per kg level.
According to National Horticultural Research and Development Foundation (NHRDF) data, wholesale prices are ruling at Rs 10-14 per kg at Asia's biggest wholesale market for onion, Lasalgaon in Maharashtra, much lower than its peak of Rs 57 per kg in August.