As onion prices witnessed a sudden spurt over the past week, the Indian central government threatened to re-impose the minimum export price (MEP) on the commodity last Thursday. The goal would be to improve domestic supply if traders try to hoard these goods to exploit the situation.
Retail prices of onions have shot up by 18% in just five days in Delhi, the country’s largest trading hub, according to the data available with the consumer affairs ministry. Onion is currently selling at Rs 33/kg in Delhi, Rs 30 in Mumbai, Rs 35 in Kolkata and Rs 27 in Chennai, the data show. The MEP system was removed in February 2018 (which had been imposed in November 2017). Subsequently, incentives given under Merchandise Exports from India Scheme (MEIS) was also doubled to 10% to boost outbound shipment as domestic prices fell.
“The government will consider strict action against hoarding and profiteering activities and evaluate the need for imposing a minimum export price on onion if the situation so demands,” an official statement said. The decision to cap price and increase supply of onion in the national capital region was taken at an inter-ministerial meeting chaired by consumer affairs secretary Avinash Srivastava.
Financialexpress.com reported how parts of major onion producing states, including Maharashtra and Karnataka, have been affected by floods, raising fears disruption of supplies.
