Government today slashed the minimum export price (MEP) of onion by a steep USD 200, USD 50 more than what the Union Cabinet decided yesterday.
The decision follows softening of prices and increased availability of the vegetable in the domestic market.
"Export of all varieties of onions...Will be subject to a MEP of USD 300 per MT," Director General of Foreign Trade Pravir Kumar said in a notification that brings down the MEP from USD 500 to USD 300.
Telecom and Law Minister Ravi Shankar Prasad yesterday had said after the Cabinet meeting that "the MEP of onion has been brought down to USD 350 per tonne as its availability has increased".
In June this year, the MEP on onion was re-introduced at USD 300 per tonne, which was further raised to USD 500 per tonne in July this year as prices moved upwards.
Onion prices were rising due to speculation amid anticipation of below normal monsoon despite sufficient supply in the country.
During June, the wholesale price of onion at Lasalgoan in Maharashtra -- Asia's largest onion market -- had risen by about 80 per cent to Rs 18.50 per kg.
At present, the rates are hovering around Rs 13-14 per kg at Lasalgoan.
Onion production is estimated to have risen to 192 lakh tonnes during 2013—14 crop year (July—June), from 168 lakh tonnes in 2012—13. Exports meanwhile fell to 13.58 lakh tonnes 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.