NAFED cuts MEP to boost exports

NEW DELHI: With onion prices softening in the domestic market, agri-cooperative NAFED has reduced the Minimum Export Price of the edible bulb by 50 dollars per tonne for most of the destinations to boost overseas sales.

"We have reduced the MEP of onion by 50 dollars a tonne for the month of January," a senior official of National Agricultural Cooperative Marketing Federation told PTI.

The average MEP now stands at 200 dollars per tonne to countries such as Singapore, UAE and others, he added.
However, the reduction of export price for Bangladesh was by 100 dollars per tonne. The MEP for Bangladesh stands at 250 dollars a tonne against 350 dollar per tonne earlier.

NAFED, along with 12 other agencies, issues no-objection certificate for onion exports and also fixes MEP every month for various overseas destinations. The MEP was drastically reduced by 175 dollars a tonne for December shipment.
The MEP was reduced as onion prices (Nasik varieties) fell to Rs 200-430 per quintal today from Rs 700 per quintal on November 30 due to increased supply, the official said.

The reduction in MEP would help India in competing with other countries like China in the export market, he noted.
"The domestic rates of onions will remain stable despite cut in export price, as supply is more in the Indian market," the official observed.

Traders said farmers have no option but to bring onion to the markets as Kharif bulb contains high moisture and therefore, cannot be stored for a longer time.

Meanwhile, exports of onions have declined to six lakh tons during last month till December 27 compared to 8.25 lakh tons in the year-ago period. Onion export was 4.38 lakh tons during April-November 2007 against 8.02 lakh tonnes in the year-ago period.