"Exports of all varieties of onions will be allowed only on Letter of Credit subject to a minimum export price of $850 [freight on board] per tonne till December 31 2017", according to a notification from the Directorate General of Foreign Trade on Thursday.
Minimum Export Price is the minimum rate below which exports are not allowed.
In a move aimed at preventing the shortage of onions in the local market and easing spiralling prices, the government has banned exports of onions below $850/tonne till the end of December. In a notification, the Directorate General of Foreign Trade (DGFT) said: "Export of onion...shall be permitted only on Letter of Credit (LC) subject to a MEP of United States dollars 850 per tonne till December 31, 2017".
Summary: The retail prices of good quality onions in Nashik have touched Rs 50 per kg, while the retail prices in major cities like Mumbai and Delhi have reached up to Rs 60 per kg.
Concerned over the rise in onion prices, the minister in August had sought that MEP be imposed on its exports by the Commerce Ministry.
In addition, the National Agricultural Cooperative Marketing Federation of India was procuring 10,000 tonnes and the Small Farmers Agriculture-business Consortium was asked to buy about 2,000 tonnes from farmers to boost supply of the staple, he had said.
The supply of onions got exhausted in the domestic market as huge quantity of exports in the initial four months of this fiscal.
Onion exports during April-July rose 56% from a year earlier to 1.2 million tonnes. The kharif crop, however, can not be stored.