2024-09-14 16:35:31
New Delhi: The government has removed the minimum export price (MEP) limits from onion and basmati rice. The government says that this step will encourage exports from the country. Also, exporting onions will increase the income of farmers. But the matter seems to be something else. Actually, the government has taken this step in view of the assembly elections to be held in Maharashtra and Haryana. Assembly elections have not been announced in Maharashtra yet, but it may happen soon. There are elections in Haryana next month. Maharashtra is the leading onion producing state in the country. Haryana is one of the major Basmati rice producing states.Food has become cheaper, veg thali has decreased by 8% and non-veg thali has decreased by 12%
Restrictions on onions and basmati rice removed
Till now MEP on onion was fixed at $550 per tonne. But Directorate General of Foreign Trade (DGFT) has issued a notification and removed it with immediate effect and till further orders. Similarly, the Commerce Department has talked about doing RCAC for the export of Basmati rice. For this, it has been decided to remove the existing MEP of $950 per tonne. Commerce and Industry Minister Piyush Goyal said that this step will help in export promotion and farmers’ income.
The price of rice was reduced last year
The government had reduced the minimum price for export of Basmati rice from $1200 per tonne to $950 per tonne in early October last year. This was done due to concerns that exports would be affected due to higher prices. On August 27, 2023, the government had decided not to allow the export of Basmati rice at a price less than US $1200 per tonne to curb illegal export of white non-Basmati rice under the guise of premium Basmati rice.
The decision on onion was taken in the middle of the Lok Sabha elections
Lok Sabha elections were held in May this year. The government lifted the ban on onion exports amid the Lok Sabha elections. However, MEP was fixed at $550 per tonne. The government continued to impose 40 percent export duty on onions. In August last year, the government imposed 40 percent export duty on onions till 31 December 2023. Before that, on 8 December 2023, onion exports were banned till 31 March this year.
What will be the impact on the price of onion and rice?
This step of the government can lead to a rise in onion prices. Even now onion is available in the retail market at Rs 80 per kg. After the removal of MEP limit on onion, export of onion to other countries will increase rapidly. In such a situation, a shortage of onion can be seen in the domestic market. This can lead to an increase in the price of onion. The same thing will apply to Basmati rice. Its price can also increase.