Govt imposes $800 per tonne minimum export price on onion; to buy additional 2 lakh tonnes for buffer

The government on Saturday imposed a minimum export price (MEP) of USD 800 per tonne on onion exports till December 31 this year with a view to increase availability of the vegetable in the domestic market and contain prices.

The decision will come into effect from October 29.

Besides, the government has also announced the procurement of additional 2 lakh tonnes of onion for the buffer, over and above the 5 lakh tonnes already procured.

The MEP is there for all varieties of onion except Bangalore Rose and Krishnapuram onions; and for cut, sliced, or broken in powder forms.

"Exports of onions is free. MEP of USD 800 FOB (free on board) per tonne is imposed till December 31, 2023," the Directorate General of Foreign Trade said in a notification.

An official statement said that the step will help in maintaining sufficient availability of onion to domestic consumers at affordable prices as the quantity of stored Rabi 2023 onion is declining.

The USD 800 per tonne MEP translates into about Rs 67 per kg.

Onion from the buffer has been disposed continuously since the second week of August in major consumption centres all over the country, and also supplied to retail consumers at Rs 25 per kg through mobile vans operated by NCCF and NAFED.

"Till date about 1.70 lakh metric tonne of onion has been disposed from the buffer. The continuous procurement and disposal of onion from the buffer are undertaken to moderate the prices for consumers while ensuring remunerative prices to the onion farmers," the statement said.

The DGFT notification added that certain onion consignments will be allowed to be exported without MEP and that included consignments that have been handed over to the Customs before this notification and is registered in their system.

Onion consignment that has entered the Customs station for exportation before this notification and is registered in the electronic systems of the concerned custodian of the Customs station with verifiable evidence of date and time stamping of these commodities having entered the customs station prior to the issuance of this notification is also permitted to be exported.

It added that export duty will not be refunded, if paid.

Onion prices have further risen to Rs 65-80 per kg in the retail market of the national capital on lower supply.

Mother Dairy, which has around 400 Safal retail stores in Delhi-NCR, is selling loose onions at Rs 67 per kg. E-commerce portal Bigbasket is selling at Rs 67 per kg, while Otipy at Rs 70 per kg.

Local vendors are selling onions at Rs 80 per kg.

Mother Dairy was selling onions at Rs 54-56 per kg on Wednesday and now the rates have touched Rs 67 per kg.

With the rise in retail prices, the Centre on Friday decided to step up the sale of buffer onion at a subsidised rate of Rs 25 per kg in retail markets in order to provide relief to consumers.

According to the Department of Consumer Affairs data, on Saturday the all-India average retail price of onion is Rs 45 per kg, but the maximum price is Rs 80 per kg. In Delhi, the average price is ruling at Rs 75 per kg.

According to the ministry, onion is being offloaded from the buffer stock in both wholesale and retail markets in those states where there is a sharp rise in prices.

Since mid-August, about 1.7 lakh tonnes of buffer onion has been offloaded in 22 states at different locations.

In retail markets, buffer onion is being offloaded through two cooperative bodies NCCF and NAFED outlets and vehicles at a subsidised rate of Rs 25 per kg.

In Delhi too, buffer onion is being sold at this subsidised rate.

A senior government official said the delay in kharif onion sowing due to weather reasons has resulted in less coverage and late arrival of the crop.

The fresh kharif onion should have started arriving by now but it has not.

With stored rabi onion getting exhausted and due to delay in the arrival of the kharif onion, there is a tight supply situation, resulting in price increases in both wholesale and retail markets, the official added.

He also mentioned that the government has doubled the buffer onion stock for the current year and this should improve domestic availability and check prices in the coming days.

For the 2023-24 fiscal year, the consumer affairs ministry through NCCF and NAFED has maintained a buffer onion stock of 5 lakh tonnes and plans to procure an additional 2 lakh tonnes of onion in the coming days.