Floor price of export onion set to be reduced to $150/tonne

PUNE: The floor price of onion export was reduced to $150/tonne at a meeting held on the Christmas holiday at the residence of Union agriculture minister Sharad Pawar. The Director General of Foreign Trade is yet to issue the notification of the decision. Sources from the agriculture ministry confirmed the meeting and the decision to reduce the floor price to $150/tonne from $350/tonne. The Central government has already reduced the floor price of onion twice in the current month.

At a public meeting in Nashik on Wednesday, Pawar had promised farmers to reduce the minimum export price of onion. He went back to the national capital in the afternoon and held a meeting in the evening, where the decision was taken. Pawar conveyed the decision to Chhagan Bhujbal, minister of tourism in Maharashtra from his Nationalist Congress Party, which runs a coalition government along with Congress in the state.

Pawar, while challenging the AAP, which has promised to reduce onion prices, had also criticised the farmers for not backing him, despite his efforts to ease their difficulties.

As per officials in the Agriculture ministry the government is likely to take the issue on scraping the onion MEP in the coming days. “A meeting is likely to take place on Monday or Tuesday on the issue of onion MEP to boost exports and help farmers realise better prices,” said the official.

Exporters said that the MEP of $150/tonne will help boost exports as the onion from competing countries like Pakistan and China is priced at about $200/tonne. The current retail prices are about Rs 20/kg to Rs 30/kg. The expected increase in exports after reduction in the floor price of onion is not likely to increase domestic prices due to bumper production of the late kharif onion across the country.

Onion exporters have now sought reintroduction of other export incentives which were withdrawn when the retail prices were between Rs 80/kg and Rs 100/kg. “The government should now reintroduce the Focused Market Scheme and the Vishesh Krishi Upaj Yojana,” said Danish Shah, partner, Pune-based Sanghar Exports.

(With inputs from Madhvi Sally)