Minimum Export Price (MEP) of Onion is fixed by an Inter-ministerial Committee (IMC), in terms of the decision of the Cabinet Committee on Prices held on 10th June, 2000. The IMC is chaired by Joint Secretary, Department of Commerce. Managing Director- NAFED, Joint Secretary, Department of Agriculture & Cooperation and Economic Advisor, Department of Consumer Affairs are its members. This committee takes stock of the arrival of onion and modal prices prevailing in the important production and consumption centres and decides the MEP of onion accordingly

In the recent months starting from July, 2013, there was a sudden spike in the prices of Onions all across the Country. The high prices continued through the months of August, September, October and November on account of various issues like untimely rains, supply constraints, less than expected production, initial speculative hoarding activities by unscrupulous traders, overall food inflation etc.

The Govt. acted swiftly by imposing an MEP of USD 650 PMT on 14th August, 2013 followed by further hikes as under:

USD 900 PMT on 19th September, 2013

USD 1150 PMT on 1st November, 2013

to augment domestic supplies and prevent any further rise in prices of onions.

However, the Inter Ministerial Committee (IMC), after factoring in improvement in the arrivals in the latter half of November and 1st Week of December, 2013, decided to reduce the MEP to 800 USD PMT in its meeting held on 10th December, 2013.

Now that the arrivals have shown marked improvement and on the expectation of better crop prospects and the sharp decline in the wholesale modal prices in production mandis of Maharashtra and other places, it has now been decided by the Government to slash the MEP to USD 350 PMT with immediate effect.

This will not only help in arresting the sharp decline in prices realised by the farmers but would also make Indian export of onions more competitive in the international markets and thereby help in stabilizing the onion prices in the domestic markets by balancing the interests of both farmers and consumers.

Minimum export price reduction for onions restores export competitiveness and helps stabilise domestic market prices. Reduction of the Minimum Export Price (MEP) for onions to USD 350 per metric tonne is an IMC determined regulatory adjustment taken to balance domestic supply and export competitiveness. The IMC, constituted under the Cabinet Committee on Prices and chaired by the Joint Secretary, Department of Commerce, sets MEPs by assessing arrivals and modal wholesale prices in key markets. After prior increases to restrict exports during a supply shock, the IMC reduced the MEP in response to improved arrivals and falling wholesale prices to stabilize domestic prices while supporting farmers and making exports more competitive.