Govt Sets Minimum Export Price for Onions

What’s in today’s article?

• Why in news?
• Production of Onion in India
• News Summary: Govt Sets Minimum Export Price for Onions
• Rationale behind this step
• Rising Onion Price

Why in news?

• Recently, the government issued a notification and set the minimum export price (MEP) for onions at $800 per metric tonne.
  • This comes after the 40 per cent export duty imposed on onions in August 2023.
• This has been done to ensure sufficient availability of onion for domestic consumers and keep the prices for the produce at affordable levels.

Production of Onion in India

• Background
  • India is the second-largest onion-growing country in the world. The Indian onions are famous for their pungency and are available round the year.
  • 
  • The choice of season depends on the region's climate and the onion variety being cultivated. Onions are more commonly associated with the Rabi season.
• Varieties
  • India cultivates various onion varieties, with the most common ones being red onions and white onions.
  • There are certain varieties of yellow onion which are suitable for export in European countries.
• Cultivation Practices
  • Onions are primarily grown through seeds, although bulb-to-bulb planting is also practiced.
  • The crop requires well-drained soil and is often cultivated in sandy or loamy soils.
  • Adequate irrigation is essential, and farmers may use drip irrigation systems to conserve water.
• Onion producing states
  • The Major Onion producing states are Maharashtra, Karnataka, Madhya Pradesh, Gujarat, Bihar, Andhra Pradesh, Rajasthan, Haryana and Telangana.
  • Maharashtra ranks first in Onion production.
• Export
  • The country has exported 2,525,258.35 MT of fresh onion to the world, worth Rs. 4,522.79 crores during the year 2022-23.
  • Major Export Destinations (2022-23):Bangladesh, Malaysia, UAE, Sri Lanka, Nepal and Indonesia.

News Summary: Govt Sets Minimum Export Price for Onions

• Trying to rein in soaring onion prices, the central government imposed a steep Minimum Export Price (MEP) of $800 per metric tonne.
• The MEP would be in place till December 30, 2023.

Rationale behind this step

• Onions from the buffer stock have been disposed continuously from August second week in major consumption centres across the country. As a result, the quantity of stored onions is declining.
  • Till date, about 1.70 lakh metric tonnes of onions have been disposed of from the buffer.
  • The continuous procurement and disposal of onion from the buffer are undertaken to moderate its prices for consumers while ensuring remunerative prices to the onion farmers.
• Hence, the measure has been taken to maintain sufficient availability of onion for domestic consumers at affordable prices.
• The central government would also procure an additional 2 lakh tonnes as buffer stock in addition to the 5 lakh tonnes already procured last year.

Rising Onion Price

• Onion prices, however, have been on the rise ever since and have started touching the sky in October.
  • The first two weeks of October witnessed the average wholesale price of onions in the key Lasalgaon APMC in Maharashtra increase more than 60%.
• The recent price rise is attributed to low stock and late arrival of the new crop.
• Earlier this year, farmers had lost around 60 per cent of their summer crop to untimely hail and rain.
• The kharif crop, which is transplanted in June-July, was delayed due to the delay in monsoons. The long break in August has also affected the crop.
• The new crop, which normally arrives early October, is delayed and would arrive only mid-November. Prices will remain on the higher side till the new crop arrives.

Q1) What are rabi crops?

Rabi crops are a type of crop in India that are sown in the winter season, typically between October and December, and harvested in the spring, generally from April to June. These crops are dependent on the winter rains, known as the "northern monsoon" or the "winter monsoon," and are a crucial part of India's agricultural calendar. The term "Rabi" is derived from the Arabic word for spring.

Q2) What are the different varieties of onions?

Onions, a staple in kitchens worldwide, come in a variety of forms, each offering a distinct flavor profile and culinary utility. The diverse spectrum of onion varieties caters to an array of taste preferences and culinary creations. From the pungent and versatile Yellow Onions to the vibrant and mildly sweet Red Onions, the onion family delivers a spectrum of flavors and textures that enhance dishes across cultures.

Source: After import duty, MEP of $800/MT on onions to ensure availability | APEDA | ABPlive