The minimum export price (MEP) on Indian onions has jumped to US$500 per tonne. The move comes after the Indian government’s introduction of a US$300 per tonne MEP in mid-June failed to stabilise onion prices in the domestic market.
According to the Indian Express, onion prices at the Lasalgaon wholesale market have leapt 40 per cent to Rs18.5 (US$0.30) per kg since the initial MEP was issued on 17 June. Retail prices have been reported as high as Rs30 (US$0.49) per kg in Deli.
In a prepared statement, an Indian government inter-ministerial committee claimed it reached a unanimous decision to raise the MEP, citing the rising domestic prices and a delayed start to the monsoon season.
Rainfall over the month of June, which signals the beginning of the four-month monsoon season, was below the national average. This has prompted fears of a decrease in domestic onion production, which is likely to lead to further inflation.
While India produces around 18m tonnes of onions per annum, less than 10 per cent of the national crop was exported last year, according to the BBC.