On 13th September 2019, DGFT and finance minister has amended export of onion policies and applied MEP (Minimum Export Price) on Onion $850 per MT FOB.
This decision was taken to keep the onion prices in budget of common man in India and to avoid shortage or black market in domestic market.
There are several farmers and traders are found in trouble because of this since the Letter of Credit (LC has made compulsory in export trade of Onion. To apply for LC and bring it in effect takes a few days and since the credit system which was very common in Onion business especially in gulf countries has almost stopped.
Because of this various new importers from countries like UAE, Saudi, Oman, Qatar, Kuwait, Srilanka, Bangladesh, Malaysia have stopped the import.
As soon as import reduces the prices in domestic markets will go down which will help domestic consumers however will affect the farmers earning.
Last year due to less rain fall and draft in Maharashtra and several areas of country affected yield of Onion crop. Farmers have a lot of hopes this year to make some money in this peak period and hope this MEP wont last longer.
