In a bid to discourage overseas shipments amid an inflation scare that threatens to stoke public rage over rising prices at local food markets, the Union Government on Tuesday imposed a minimum export price (MEP) of $300 per tonne on onion exports. This development comes right after wholesale price inflation accelerated to a five-month high of 6.01% in May and three months post previous government withdrew it. Until early March, the minimum export price was $150 per tonne.
However, with this, export of all onion varieties will be subject to MEP of $300 per tonne, the rate below which no exports are allowed. Rising prices of essential food items like vegetables, fruits and cereals, pushed up wholesale price index based inflation to five-month high in May.
The UPA government had imposed MEP on onion in September 2013 and then raised several times to curb exports as retail prices had shot up as high as Rs 100 per kg in major parts of the country. The country had to even import onion.
The country consumes about 15 million tonnes of onions a year, using them as the base for curries and traditional dishes such as biryani and bhaji. In the past, higher onion prices have contributed to the fall of state governments. While, India exports about 1.5 million tonnes of onions a year.