In the past month, the price of onions in India has gone up by up to 57%. However, the Union government might not impose a minimum export price, as it thinks that the price rise is not due to demand, but due to a supply crisis.
The minimum export price (MEP) makes ensures that exports do not happen at the cost of local consumption. The state of Maharashtra is considered to be one of the largest producers of onions in the country. The MEP in May 2012 was abolished so that the Indian traders could take advantage of the increasing prices of onions in the global market.
SK Goel, the additional chief secretary of Maharashtra, in a letter to the commerce secretary said, “The present price situation is due to a seasonal break in the arrival of onions. Prices will be stable with the commencement of the arrival of Rabi onion in the market”. Goel further wrote that the onion production in 2012-13 is expected to be 51 lakh tonne, against 56 tonne in 2012.
The additional chief secretary also pointed out that the production in Kharif and late Kharif seasons decreased due to the lack of rains. Out of the total production of onion, the current Rabi production is expected to be normal.