The government decided to lift the ban on the export of onions as the price of onion has been stabilized. The move will protect the interests of farmers as prices are likely to fall sharply due to a bumper rabi crop. The decision was approved in a meeting of a Group of Ministers (GOM) headed by Home Minister Amit Shah. The lifting of ban on onion is expected to be effective. GOM will also discuss whether to reduce or scrap the Minimum Export Price (MEP) on onion to facilitate outbound shipments.
Background:
♦ In September 2019, GoI banned onion exports and imposed a MEP of $850 per tonne due to supply-demand mismatch. Shortage of onion occurred due to excessive rains and floods in key producing states, including Maharashtra. The arrival of the rabi crop of onion has begun and will increase from mid-March onwards.
♦ The monthly harvest expected in March is over 40 lakh MT and 86 lakh tonne in April as compared to 28.4 lakh MT in 2019.
Note: Minimum Export Price is the rate below which no exports are allowed.
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