India Removes Minimum Export Price on Onions After Good Harvest
India has decided to remove the minimum export price (MEP) on onions, according to a notification from the Directorate General of Foreign Trade (DGFT). This decision follows a strong kharif crop production and favorable monsoon, along with stable market conditions at both mandi and retail levels.
Earlier, on May 4, 2024, the government had lifted the onion export prohibition and allowed exports with an MEP of USD 550 per tonne and an export duty of 40%. Initially, in December 2023, India had prohibited onion exports until March 2024, later extending the restriction until further notice. However, exports were allowed based on permissions granted by the central government to other countries upon request.
Rabi onions, harvested from April to June, account for 65% of India’s onion production and meet consumer demand until the kharif crop is harvested in October-November.
Doubts Revealed
Minimum Export Price -: This is the lowest price at which a country allows its goods to be sold to other countries. It helps protect local farmers by ensuring they get a fair price.
Kharif Crop -: These are crops that are sown at the beginning of the monsoon season and harvested at the end of the monsoon season, like rice and onions.
Monsoon -: Monsoon is a seasonal wind in India that brings heavy rains, which are very important for farming.
Export Ban -: This is when a country stops selling certain goods to other countries. It can be done to make sure there is enough for people in the country.
USD 550 per tonne -: This means that the minimum price for exporting onions was set at 550 US dollars for every 1,000 kilograms.
Export Duty -: This is a tax that a country charges on goods that are sold to other countries. It can make the goods more expensive for buyers in other countries.
Rabi Onions -: These are onions that are planted in winter and harvested in spring. They help meet the demand for onions until the next crop is ready.
