The government on Friday raised the export price of onion, for the second time within 40 days, by $30 per tonne to $230 a tonne to discourage shipment of the kitchen staple outside the country.
However, the Minimum Export Price (MEP) of two superior varieties— Krishnapuram and Bangalore Rose — was kept unchanged at $350 per tonne, Directorate General of Foreign Trade (DGFT) said.
“MEP of onions other than Bangalore Rose onions and Krishnapuram onions will be $230 per tonne Freight on Board (FOB). It was $200 per tonne as notified on June 8, 2011,” DGFT said.
On June 8, the government had raised the export price of onion to $200 a tonne from $170 a tonne.
Hike in onion MEP appears to be an apparent attempt by the government to lower shipment of the important vegetable outside the country.
Food inflation went up to 8.31 per cent during week ended July 2 and onion prices increased by 30 per cent during the week under review.
In December last year, the government had imposed a ban on export of the kitchen staple after its prices skyrocketed to Rs. 80-85 per kg in the retail markets across the country.
The export ban was lifted in February this year after prices fell to normal levels.
India produced 13 million tonnes of onion in 2010-11.
While opening export of onions in February the government had kept MEP of the bulb at a higher level of $600 per tonne as a precaution against the price shooting up again.
After complaints from traders and intervention of Agriculture Minister Sharad Pawar, the MEP was reduced in phases.
India’s onion export dropped by over 31 per cent in 2010-11 at 12.89 million tonnes as compared to the previous year.