In a move aimed at boosting onion shipments, the Centre today decided to cut minimum export price (MEP) of the commodity for the second consecutive month by 20 per cent to an average USD 200 a tonne for May as domestic supply improved from summer crop arrival.

In March, onion's MEP stood at USD 400, which was further reduced to USD 250 in April.

"We have decided to cut the MEP by USD 50 for May to help push up exports," said a senior official with the National Agricultural Cooperative Marketing Federation (Nafed), the designated agency for regulating onion exports.

Due to robust arrival of onion crop in Maharashtra, Gujarat and Rajasthan, the wholesale price of onion at present has fallen significantly to Rs 400-450 a quintal at Nasik, Maharashtra from Rs 700 a quintal in March, the Nafed said.

As prices have started sliding sharply, the MEP has been kept at lower level to assist farmers to realise better value for the produce through export, the official noted.

Nafed, along with 13 other agencies involved in onion export, decides the MEP every month. No export can take place below the MEP and all contracts are registered with Nafed.

Asked whether it would impact domestic prices, the official said the MEP revision would not affect as

availability of onion has improved with arrival of Rabi crop from April 1.

The trend of raising the MEP started from November 2009 after onion prices sky-rocketed in the domestic market. The MEP was around USD 200 in April 2009.

High MEP resulted in substantial fall in exports during December 2009 and January and February 2010.

The country exported 18.14 lakh tonne onions in the 2009 -10 fiscal.

Keywords: onionexports