The Centre on Thursday issued a notification for the removal of the minimum export price for onions. Commerce and industry minister Nirmala Sitharaman said the move will help farmers realise better prices. Minimum export price, or MEP, is the rate below which traders are not allowed to export products. A rise in MEP restricts exports and improves domestic supply.
The Times of India reported that the government wants to boost overseas shipments of the commodity as domestic prices have substantially fallen to Rs 10 a kg, compared to Rs 26 in late November. India exports around 1.5 million tonnes of onion annually.
Earlier this month, the government had reduced the MEP for onions to $400 per tonne from $700. Falling domestic prices then led to farmers in Maharashtra demanding the government to scrap the MEP completely. The state government complied and requested the same from the Centre.
The government had hiked the onion MEP to $700 per tonne from $425 in August, after wholesale and retail prices of the vegetable had skyrocketed on lower output due to unseasonal rains.
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