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MEP Impact on Onion Exports: Government's $800/tonne MEP.



  Oct 31, 2023

Minimum Export Price (MEP) and its Impact on Onion Exports



What is MEP?

Minimum Export Price (MEP) is a trade policy instrument used by governments to set the lowest price at which a commodity can be exported.
The aim is to discourage exports and make sure that sufficient quantities of essential items, like food, remain available in the domestic market at reasonable prices.

Why is it Imposed?

The government imposed an MEP of $800 per tonne on onion exports to ensure adequate availability of this staple vegetable in the domestic market.
The decision comes as the stored quantity of Rabi 2023 onions is depleting, making it necessary to keep the domestic market well-supplied.

Implementation and Numbers

Effective Date: The decision will come into effect from Sunday and will remain in place until December 31, 2023.

Procurement: In addition to this, the government announced the procurement of an additional 2 lakh tonnes of onions for buffer stock, over and above the existing 5 lakh tonnes.

Price Translation: The MEP of $800 per tonne translates roughly to Rs.67 per kg, which helps to control domestic onion prices.

Additional Information

Free on Board (FOB): The $800 FOB per tonne means that the cost of delivering the onions to the port and the export charges are not included in the MEP.

Buffer Stock: As of now, about 1.7 lakh metric tonnes of onion have been released from the buffer. The process of continuous procurement and disposal from the buffer helps maintain market stability.

By setting an MEP, the government aims to strike a balance between the interests of farmers who grow the onions and the consumers who buy them, ensuring a stable and reasonable pricing environment for both.

SRIRAM’s


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