In the face of increased pressure on supply and pricing, the Union government on Saturday placed restrictions on onion exports and established a floor price for shipments of the crop abroad. In a few places, retail prices have increased significantly in the past week. For example, in Delhi, the price of a kilogramme of vegetables has increased from ₹25–30 to ₹50–60. During the ongoing holiday season, when demand for numerous food goods increases, prices may rise even more if supply are scarce.
According to a notification from the directorate general of foreign trade, a minimum export price (MEP) of $800 per tonne on a freight-on-board basis would be applied on the item starting on October 29 and will last until December 31. A premium variation of the bulb is not subject to this requirement.
MEP is a price cutoff point below which sellers are unable to sell to customers worldwide. It’s a policy intended to curb low-cost exports and increase domestic supply, which will help keep costs down.
After purchasing 500,000 tonnes of onions previously, the government said on Saturday that it will buy an additional 200,000 tonnes of onions for its buffer stock. According to an official, the government will keep selling onions in the roughly sixteen cities where high prices are the norm.
Due to a delayed harvest and a lesser crop as a result of a patchy summer rainfall, supplies in marketplaces have decreased. “The measure has been taken to maintain sufficient availability of onion to domestic consumers at affordable prices as the quantity of stored rabi 2023 onion is declining by curbing the quantity of onion exports,” a statement mentioned.