$550/tonne minimum export price removed on onions

The central government on Friday removed a minimum export price (MEP) applicable to onions. 

Until now, the MEP on the kitchen staple stood at $550 per tonne, which translated to about Rs 46 per kilogram. 

In May, the government removed a ban on onion exports but introduced the minimum export price of $550 per tonne, with an aim to boost farmers' income.

It had banned the exports of the bulb in December in view of a surge in domestic prices.

A minimum export price is a regulatory tool to set a base price for the export of certain goods. It is the lowest price at which a product can be exported and used to control the export price of certain goods.

Typically, MEP is used to prevent dumping, or the act of selling goods at excessively low prices in international markets in a bid to manipulate domestic rates.

It is by fixing a minimum export price that authorities ensure that domestic prices do not fall below a certain level due to the export of goods at lower prices.