GoI allows Export of Onions

In September 2019, GoI had banned the export of onions in order to bring down its prices in the country. The prices of the key cooking ingredient had soared due to supply disruptions and floods in the major onion producing states Haryana and Maharashtra.

Highlights

Onion prices peaked in December 2019 as rains hit the Kharif crop badly. Now, with the arrival of Rabi crop, the shortage is getting replenished and hence GoI has removed the ban on exports of onions. Also, the Minimum Export Price imposed on onions as 850 USD per tonne is being removed.

Minimum Export Price

The Minimum Export Price is fixing a floor price. An exporter cannot sell his product below Minimum Export Price. The MEP is usually imposed on Basmati Rice and Onions to restrict their export volumes.

Current Concerns of MEP

In order to export a product, a country should produce genuine export surplus. The concept of MEP was introduced by GoI to maintain the above status. However, the exporters have become masters in circumventing MEP and hence it has become ineffective to restrict export of a commodity.

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