The government Wednesday hiked the minimum export price of onions by 67 percent to $500 per tonne in a bid to discourage exports and improve local supplies as the price of the vegetable surged in domestic markets.
The government has taken tough steps for the second time in nearly two weeks to curb onion exports. With a view to discouraging onion exports, Prime Minister Narendra Modi’s government had June 17 set a minimum price of onion exports at $300 per tonne.
After the increase, the minimum export price of onions translates to Rs.30 per kg. Onion prices have soared in the domestic markets in the recent weeks and the vegetable is now sold for Rs.20-30 per kg in retail markets.
The decision to hike the minimum export price was unanimously taken by an Inter-Ministerial Committee at a meeting here June 30.
“Keeping in view the rising retail and wholesale prices and delayed monsoon, the Committee unanimously decided to fix the minimum export price at $500 per tonne which translates to Rs.30 per kg with a view to arresting domestic price rise and augmenting domestic supply,” a commerce ministry statement said.
The commerce ministry said there was “no appreciable decline in the exports of onions” despite the $300 per tonne minimum export price set June 17.
Rise in general price level, especially in the prices of onions and potato, has been a big worry for Modi government.
Finance Minister Arun Jaitley said controlling inflation is one of the major challenges confronting the government.
India’s wholesale price-based inflation rose to a five-month high of 6.01 percent in May against 5.20 percent in the previous month due to a sharp jump in food and fuel prices.
Retail inflation measured in terms of the Consumer Price Index (CPI) was recorded at 8.28 percent in May, according to the latest government data.
The Centre has convened a meeting of state food ministers Friday to discuss “measures to check unreasonable increase in prices of some food items”.
Finance Minister Jaitley will chair the meeting to be held in the national capital.
“The prices of some of the commodities, especially onion and potato, are a matter of concern. It is very urgent to discuss the measures to be taken to address the issue,” the food ministry said in a statement Tuesday.
“Steps to prevent hoarding of these commodities and plans for distribution of specific essential items through public channels and improving other supply channels will be discussed in the meeting,” the statement said alluding to the state food ministers’ meeting.