Onion prices in India may stay high for at least a month
Onion prices are likely to remain high for at least a month due to low supplies, while exports are expected to stay robust as the removal of the 40% export duty has made overseas shipments more profitable amid strong global demand.
The central government had removed the export duty on Saturday, while introducing a minimum export price (MEP) to discourage onion exports.
On October 28, the Ministry of Commerce and Industry had issued a notification imposing a MEP of $800 per tonne on onion exports till December 31. The same day, the Ministry of Finance issued a notification stating that the customs duty on export of onions was made 'nil' in 'public interest'.
The export duty was imposed on August 19 and was effective till December 31.
ET first reported about under-invoicing by exporters to evade export duty, which had kept exports robust, following which, the government had imposed MEP, which was being demanded by a section of traders.
However, now, the same section of traders has approached the government on the negative consequences of export duty removal on the domestic onion market.
Why won’t onion exports fall despite the imposition of MEP?
On October 28, the Centre imposed a minimum export price (MEP) of $800 per tonne on onion exports. The decision to impose MEP was taken following a 60% jump in wholesale prices within a fortnight.
The objective of introducing MEP was aimed at curtailing onion exports, which had remained strong even after the government slapped the 40% export duty in August. Multiple trade sources had claimed that the duty failed to deter onion exports as many traders had resorted to under-invoicing to pay less duty.
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