Amid protests by farmers against crashing domestic prices, Agriculture Minister Sharad Pawar has asked the Commerce Ministry to scrap the minimum export price for onions to help boost overseas shipments.
Onion prices have fallen below Rs 10 per kg at Lasalgoan in Maharashtra, the largest wholesale onion market in Asia, from a high of Rs 60 per kg in September.
In the retail markets, rates have fallen to Rs 30-35 a kg from Rs 100-level.
"Pawar has written to the Commerce Minister pointing to the crashing wholesale prices of onions at major producing centres and requested him to encourage exports to help farmers by removing the minimum export price of onions," sources said.
Farmers in producing states such as Maharashtra have been protesting and have made representations to Pawar, demanding the removal of export restrictions.
The government had imposed the MEP on onions to discourage exports as one of the measures taken to curb rising domestic prices, which touched Rs 100 per kg in October in the retail markets due to shortages.
The MEP had been raised regularly up to $1,150 per tonne in November. Last week, the Commerce Ministry lowered the onion MEP to $350 per tonne from $800 per tonne to arrest the fall in prices by encouraging farmers to export.
Onion exports had come down substantially to 29,000 tonnes in August due to the curbs. In the April-November period of this year, about 8.53 lakh tonnes of onions were shipped overseas compared with 18.22 lakh tonnes in the same period in 2012-13.
Onion prices are declining due to increased arrivals in mandis following better crop prospects, Nasik-based onion expert Satish Bonde said.
Currently, farmers are harvesting the late summer (kharif) onion crop in major growing states -- Maharashtra, Gujarat, Madhya Pradesh and Rajasthan.