India raises onion export price further

FE Team | Published: August 25, 2015 00:00:00 | Updated: November 30, 2026 06:01:00

In a move aimed at augmenting domestic availability by deterring shipments, the minimum export price (MEP) of onion in India has been steeply raised to $ 700 per tonne that might increase onion prices in Bangladesh's markets, reports UNB.
With retail onion prices crossing Rs 60 per kg in many centres ahead of crucial elections to the Bihar assembly, India has practically banned its export from the country, The Indian Express has reported.
This follows an earlier increase from $ 250 to $ 425 per tonne, which was effected on June 26.
The last hike in the MEP-below which no exports are permitted-had very little impact on prices. Between June 26 and now, wholesale prices at Lasalgaon (Maharashtra) - India's biggest market for onions - rose from Rs 1,500 to Rs 5,700 per quintal. Retail prices in Delhi, too, climbed from Rs 34 to Rs 66 per kg during this period, the report says quoting data from the department of consumer affairs.
India exported 1.238 million (12.38 lakh) tonnes of onion in 2014-15.
While barely 6-7 per cent of India's onion production is exported, the quantities that get shipped out are still considered significant enough to influence sentiment.
This is because the bulk of exports happen from Maharashtra, the country's largest producer and also price setter.
Trade sources, however, believe that the latest MEP increase will not make much of a difference. "About 80,000-100,000 tonnes went out during June-July. But since then, there have been no exports. Once wholesale prices crossed Rs 2,500-2,700 per quintal towards July-end, our onions became uncompetitive vis-à-vis the crops of China and Egypt now selling at $ 400-450 per tonne," said a source.
The current spiral - prices at Lasalgaon have surged by Rs 2,500 per quintal in the past two weeks - is seen to have little to do with exports as much as drought in the main onion growing belt of Maharashtra, Karnataka, Rayalaseema and Telangana.
Poor monsoon in these parts has raised concerns over delay in the harvesting of the kharif onion crop, which arrives from mid-September. Currently, the market is predominantly being fed by the stored onions from the last rabi crop (harvested in April-May), which also suffered some damage from the untimely rainfall and hailstorms in March.
Apart from virtually banning exports, the Centre has decided to import onions on government account. The state-owned MMTC Ltd has already floated a tender for import of 10,000 tonnes, which is scheduled to open on August 27 for arrivals.