Onion export ban lifted; $ 475/T fixed as minimum export price

A ministerial panel has lifted the ban on onion exports under pressure from traders and farmers, just 10 days after the Centre imposed it to rein in prices. However, exports will be regulated by a minimum export price, which has been fixed at $475 a tonne. The decision was taken by an empowered group of ministers (EGoM) on food, which met here on Tuesday under the chairmanship of Finance Minister Pranab Mukherjee.

The government had banned onion exports on September 9 after its retail price touched Rs 25 a kg. The clampdown led to prices dropping by aboutRs3 a kg in retail and by about Rs 400 a quintal in the wholesale market, from about Rs1,000 per quintal, triggering protests from farmers in the key producing states of Maharashtra and Karnataka. The ban had been imposed despite a split in the EGoM over the wisdom of the decision.

Mukherjee had met Maharashtra Chief Minister Prithviraj Chavan and his deputy on Saturday to discuss lifting of the ban to which traders in key markets, including Nasik, had reacted by going on strike.

Agriculture Minister Sharad Pawar had said the late kharif crop, due in November up to January, would boost supplies and push prices down, perhaps even to below production price levels. India is forecast to produce 15.14 million tonne of onions in 2011-12, compared with the output of 14.56 million tonne in the previous year.

In January, retail onion prices had spiraled to Rs 80 a kg after supplies from a rain-affected crop started drying up and traders resorted to hoarding.

The EGoM also relaxed stockholding limits for sugar and pulses imposed on bulk users