Govt lifts export ban on onions after domestic price crash

New Delhi, Feb 17 (PTI) Government today decided to liftban on exports of onion, following farmers'' protest over crashin domestic prices within two months of touching Rs 80 a kg.

The decision to this effect was taken at the meeting ofthe empowered group of ministers (EGoM) on food, headed byFinance Minister Pranab Mukherjee.

But, as a precautionary measure against possibility ofprices shooting again, the EGoM decided to allow shipments ofonions at a Minimum Export Price (MEP) of USD 600 (About Rs28,000) per tonne, a senior government official said.

The ministers'' panel met in the absence of AgriculturalMinister Sharad Pawar, Food Minister K V Thomas and CommerceMinister Anand Sharma.

Pawar, who is President of the International CricketCouncil, is away to Dhaka for opening ceremony of the WorldCup, while Thomas is attending a food conference in Kolkata.

The Commerce Minister is on a foreign tour for signingfree trade agreements with Japan and Malaysia.

The meeting was attended by Defence minister A K Antony,Home minister P Chidambaram and Deputy Chairman of PlanningCommission Montek Singh Ahluwalia.

An official of agri cooperative NAFED, which used toregulate onion exports, said the restriction on exports by MEPof USD 600 per tonne would not encourage overseas shipments.

"NAFED had proposed the MEP at USD 350-375 per tonne," hesaid.

The government had banned onion exports in the lastweek of December, 2010 to augment domestic supply and containrising onion prices, which had touched Rs 70-80 per kg.

The measure along with action against hoarders andarrival of fresh crop led to crash in prices to Rs 4-12 kg inthe wholesale, leading to protests in Nashik and other growingareas of Maharashtra.

In the retail markets, onion prices are ruling at Rs 20-25a kg.

Prior to the ban, India exported 11.58 lakh tonnes ofonions mainly to gulf countries, Sri Lanka and Malaysia duringApril-November of this fiscal.