India yesterday imposed a minimum export price (MEP) of $300 a tonne on onion to curb its overseas sales amid an inflation scare that threatens to stoke public anger over rising prices at local food markets.
Prime Minister Narendra Modi has made tackling inflation his top priority after widespread resentment about rising prices contributed to the exit of the previous government last month.
Onion is now selling at Rs 25-30 a kg in the Indian capital, up from Rs 15-20 a fortnight ago. Until early March, the minimum export price was $150 a tonne.
India's move is likely to fuel onion prices in Bangladesh markets as traders may squeeze supply.
In Dhaka, onion prices ranged between Tk 28 and Tk 35 a kg yesterday, a 5 percent rise from a month ago, according to Trading Corporation of Bangladesh.
The MEP, the rate below which no exports are allowed, has been re-introduced barely three months after India's previous government abolished it in March.
In India, rising prices of essential food items -- vegetables, fruits and cereals -- pushed up the wholesale price index-based inflation to a five-month high of 6.01 percent in May.
India annually exports 15 lakh tonnes of onions on average, Consumer Affairs Secretary Keshav Desiraju said. "The MEP is expected to have some impact on the increasing domestic supply and check rising prices."
The Centre had imposed an MEP on onion in September 2013, and it was raised several times to curb exports as retail prices had shot up as high as Rs 100 a kg in major parts of India which had to even import onion.
India produces around 17-18 million tonnes of onion a year. It exported 13.58 lakh tonnes of onions in 2013-14, compared to 18.22 lakh tonnes in the previous year.
Source:- thedailystar.net
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