Last month, the minimum export price on onion was re-introduced at USD 300 per tonne barely three months after the previous government had abolished it in March. MEP is the rate below which no exports are allowed.
Retail prices of onion have risen to about Rs 25-30 per kg, while the wholesale prices are ruling at Rs 18.50 per kg in the national capital.
The decision to increase the onion MEP was taken on June 30 by an Inter-Ministerial Committee.
"Keeping in view, the rising retail and wholesale prices and delayed monsoon, the Committee unanimously decided to fix the MEP at USD 500 per tonne which translates to Rs 30 per kg with a view to arrest domestic price rise and augment domestic supply," an official statement said.
The committee observed that the wholesale and retail prices of onion are going up in producing and consuming mandies and despite MEP at USD 300 per tonne, there is no appreciable decline in the exports of onion.
Onion prices have been rising due to speculation amid anticipation of below normal monsoon despite sufficient supply in the country.
The wholesale price of onion at Lasalgoan in Maharashtra -- Asia's largest onion market -- has risen by about 80 percent during June to Rs 18.50 per kg.
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. Exports meanwhile fell to 13.58 lakh tones last fiscal from 18.22 lakh tonnes in 2012—13.
The domestic demand during the lean period from June to November is met through stored rabi (winter) and fresh kharif (summer) produce.

The major difference between wholesale and retail prices of onions is bringing tears into the eyes of the common man across the country.
People across the country have condemned the hike in onion prices and lamented over the government’s apathy towards poor and middle classes, who are deeply affected by the skyrocketing food prices.

Concerned over the rise in prices of food items, the Centre swung into action with Prime Minister Narendra Modi taking stock of the situation and the states being told to take urgent measures against hoarding and ensure ‘uninterrupted’ flow of supplies.


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