Food Minister Ram Vilas Paswan has suggested to the Commerce Ministry to first impose a ban on onion exports before allowing imports from other countries to boost domestic supply and check prices.
Pawan has suggested this in a letter written to Commerce Minister Nirmala Sitharaman when the Food Ministry's views were sought on importing one lakh tonnes of onions, officials in the know said.
In the letter, Paswan said that onion exports have come down marginally due to the imposition of MEP by the government last month. But onion in small quantities are still being exported and this needed to be curbed first before allowing imports from other countries.
Last month, the minimum export price (MEP) on onion was re-introduced at USD 300 per tonne barely three months after the previous government in March had abolished it. MEP was again raised to USD 500 per tonne early this month to curb exports.
MEP is the rate below which no exports are allowed.
Onion prices have been rising due to speculation amid anticipation of below normal monsoon despite sufficient supplies in the country.
The wholesale price of onion at Lasalgoan in Maharashtra — Asia’s largest onion market — have risen by over 50 per cent to Rs 20.15 per kg today, from Rs 13.25 per kg on the same day last month.
Retail prices of the bulb have almost doubled to Rs 30-40 per kg in the national capital since May.
Onion production is estimated to have risen to 192 lakh tonnes during 2013-14 crop year (July-June), from 168 lakh tonne in 2012-13. Exports meanwhile fell to 13.58 lakh tonnes last fiscal from 18.22 lakh tonnes in 2012-13.
The domestic demand during the lean period from June to November is met through stored rabi (winter) and fresh kharif (summer) produce.