As the prices of onions soar in the local market, the Ministry of Commerce has stepped in to address the issue by introducing measures aimed at stabilizing prices and ensuring the availability of this essential kitchen staple.
Minimum Export Price (MEP) Set at $1200 per Metric Ton
The Ministry of Commerce has implemented a Minimum Export Price (MEP) for onions and shallots to tackle the escalating prices. The MEP has been fixed at $1200 per metric ton at freight on board (FOB).
This move is significant as it helps regulate the export pricing of onions, ensuring that exports do not further strain local supplies.
Export Under Advance Payment Terms Only
In addition to setting the MEP, the Ministry of Commerce has also laid down specific conditions for onion exports. Under the notification issued by the ministry, the export of onions will only be allowed under Advance Payment terms.
This means that exporters will need to make full payments in advance before shipping onions abroad. This measure is designed to prevent excessive buying by exporters and ensure a sufficient supply of onions in the domestic market.
Addressing the Factors Behind Rising Onion Prices
The surge in onion prices in the local market can be attributed to several factors. One major contributor has been the heavy buying by exporters, particularly in response to India’s restriction on onion exports until March 2024.
This restriction has prompted increased demand for onions from other sources, including Iranian and Kabul onions. Exporters have been actively tapping into these alternative sources to meet the growing export demand, further exacerbating the local onion shortage.
The result has been a significant increase in onion prices, with some retailers reporting prices exceeding Rs. 240 per kg.
The Ministry of Commerce’s decision to fix the Minimum Export Price (MEP) for onions and mandate Advance Payment terms for exports is a proactive step aimed at stabilizing onion prices in the local market.
These measures will help strike a balance between meeting export demands and ensuring an ample supply of onions for domestic consumers.