On 2 February, the Commerce Ministry removed India’s minimum export price (MEP) for onions.
The Times of India reported that just a day after the removal, onion prices at the country’s biggest wholesale market, Lasalgaon, shot up by 46 per cent from around US$22/100kg last Friday to US$32/100kg on Monday.
Local onion prices were expected to increase dramatically after the MEP removal as supplies dwindle due to higher export volumes.
Prior to the removal, the MEP was set at US$700 a tonne, which was imposed in January – reduced from last November’s price of US$850 a tonne. The MEP was set to curb a rise in wholesale onion prices.
Hindu Business Line reported that scrapping the MEP is now expected to reduce volatility in onion prices for India.
Union Finance Minister Arun Jaitley has emphasised a need to promote agricultural exports following budget announcements this month, but is also focused on ensuring security for the local market.
Jaitley recently revealed a 5,000m rupee (US$78m) Operations Greens scheme. The scheme will aim to improve year-round availability of staple vegetables for local consumption.