The cabinet has slashed the minimum export price for onions by 30% to $350 per tonne following improvement in domestic supply situation and softening of prices. The minimum export price was first raised to $300 per tonne in mid-June after fears of domestic shortages, and was further increased to $500 per tonne in July to discourage exports.
Onion prices were rising due to speculation amid anticipation of below normal monsoon despite sufficient supply in the country. During June, the wholesale price of onion at Lasalgoan in Maharashtra -- Asia's largest onion market -- had risen by about 80% to Rs 18.50 per kg. At present, the rates are hovering around Rs 13-14 per kg at Lasalgoan.
India consumes about 15 million tonnes of onion a year, using them as the base for curries and traditional dishes such as biryani and bhaji. Onion production is estimated to have risen to 192 lakh tonnes during 2013-14 crop year (July-June), from 168 lakh tonne in 2012-13, while exports have fell to 13.58 lakh tonnes last fiscal from 18.22 lakh tonnes in 2012-13.