New Delhi: Concerned over rising onion rates, the union government on Tuesday imposed a minimum export price (MEP) of USD 300 per tonne on the kitchen staple to curb overseas sales and check retail prices. Onion prices have risen to about Rs 25-30 per kg in the national capital from Rs 15-20 per kg a fortnight ago.
The MEP, which is the rate below which no exports are allowed, has been re-introduced barely three months after the previous government in March had abolished it. Export of all onion varieties will be subject to MEP of USD 300 per tonne, commerce ministry said in a notification.
"The Commerce Ministry has imposed a MEP of USD 300 per tonne on onions to curb exports," Consumer Affairs Secretary Keshav Desiraju said after a meeting on 'measures taken to tackle food inflation' at PMO. Rising prices of essential food items like vegetables, fruits and cereals, pushed up wholesale price index based inflation to five-month high of 6.01 per cent in May.
Stating that country exports on an average 15 lakh tonnes of onions a year, he said, "The MEP is expected to have some impact on increasing domestic supply and check rising prices". Desiraju said the Consumer Affairs department, which monitors both retail and wholesale prices of food items, has flagged concern about price rise in onion to concerned departments and suggested urgent measures to check prices.
With inflation on top of his agenda, Finance Minister Arun Jaitley will be meeting Union Agriculture Minister Radha Mohan Singh. The Agriculture Ministry has stepped in to control the situation. Agriculture Ministry sources told CNN-IBN that officials have been instructed to ensure smooth supply of onions from Nasik. Sources added that the ministry has urged state governments to act against hoarders to check onion prices.
"Price rise in onion is not alarming now but we have to be careful and the government is alert," he said. In the meeting, the principal secretary to the Prime Minister discussed various measures taken by concerned departments to address food inflation, sources said. The secretaries from Agriculture, Consumer Affairs and Commerce Ministries were present in the meeting.
The Centre had imposed MEP on onion in September 2013 and then it was raised several times to curb exports as retail prices had shot up as high as Rs 100 per kg in major parts of the country. The country had to even import onion. India produces around 17-18 million tonnes of onion a year. During last fiscal, India exported 13.58 lakh tonnes of onion against 18.22 lakh tonnes in the previous year.
There was deadlock over a dispute between the onion wholesale traders and labourers, who have been demanding that their remuneration be hiked. The wholesale traders refused to do so and decided to boycott auction of onions since Monday. The deadlock is likely to push up the price of onions, as there will be a shortage of supply. In fact, it has already increased in by Rs 6-8 in several cities.
Congress leader Ajay Maken hit out at the NDA government saying, "It seems the BJP has changed their stand after coming to power. Today they are blaming hoarders for inflation, and when we used to say it during the UPA rule, they used to blame us for corruption."
(With additional inputs from PTI)
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