The Centre on Thursday decided to lift the ban on the export of onions following protests by farmers and traders in Nashik over the crash in the domestic rates within two months of the prices hitting Rs. 80 per kg, but refrained from announcing the decision. The ban on onion exports was imposed last December.

A decision on removing the stay on the export of five lakh tonnes of sugar was deferred.

These decisions were taken at the meeting of the Empowered Group of Ministers chaired by Finance Minister Pranab Mukherjee in the absence of Union Agriculture Minister Sharad Pawar, Commerce Minister Anand Sharma and Minister of State for Food K.V. Thomas, who are all out of town.

The proposal to lift the ban on onion exports was moved by the Department of Consumer Affairs with the concurrence of the Agriculture Ministry.

As a precautionary measure, the EGoM, however, set a Minimum Export Price (MEP) of $600 (Rs.28,000 approximately) per tonne. No quantitative restriction was set.

Well-placed sources told The Hindu that the issue of M.E.P was not settled yet as there were apprehensions that with Pakistan exporting onions at about $350 per tonne, Indian exporters may be at a disadvantage, as both were competing for the same market.

Another meeting of the EGoM may take place early next week before the decision is notified.

With improved production and better mandi arrivals, onion prices have sunk to between Rs. 2 and Rs. 4 per kg, although the model (average) price is about Rs. 8 per kg. In domestic retail markets, the bulb is still priced between Rs. 20 and Rs. 25 per kg.

Maharashtra Chief Minister Prithviraj Chavan had written to the Commerce Minister, seeking a lifting of the ban. He was supported by Mr. Pawar, as this year's production was estimated to be higher than that of last year.

This year's output is expected to be 131.47 lakh tonnes as against the 121.91 lakh tonnes last year. The crisis in the last two months was on account of shortfall in kharif crop.

Prior to the ban, India exported 11.64 lakh tonnes of onions mainly to the Gulf countries, Sri Lanka and Malaysia, during April-November of this fiscal. Last year, the country had exported 18.73 lakh tonnes.