The Indian central government has removed the minimum export price (MEP) on onions, bringing relief to the onion farmers in the country.
The decision came into effect on Friday evening, reported the Times of India.
The Indian government imposed the MEP in November last year to keep the domestic market stable and the rising prices in check.
In a notification issued by the Union Ministry of Commerce of India, Director General of Foreign Trade Alok Vardhan Chaturvedi said the MEP on all varieties of onions had been removed.
A source from the Indian Ministry of Agriculture told the Times of India: “During the recent meeting with the officials from the Ministry of Commerce, it had already been decided to remove the MEP on onions if the average wholesale price of onions dropped below Rs2,000 [Tk2,589] per quintal [1 quintal = 100kg].
“Now, the average wholesale onion prices have dropped to Rs1,500 [Tk1,941] per quintal. Hence, it was decided that the MEP on onions would be removed.”
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Indian trade experts appreciated the government move, saying the removal of MEP was the first step towards tackling volatility in onion prices in the Indian market.
This step will help in arresting the crash in the wholesale onion prices, as the MEP has had a detrimental effect on the prices that farmers could obtain from selling their products, the report said.
Around two years after withdrawing the MEP, the Indian central government re-imposed MEP on onions on November 23, 2017 at a price of $850 (Tk70,472) per ton, which was reduced to $700 (Tk58,036) on January 19 this year.
The fluctuating onion prices in the Indian market and the resulting MEP affected the onion prices in Bangladesh, too, which rose to nearly Tk100 in December last year due to the short supply of local production and the higher import costs of Indian onions.