Maharashtra, the top onion producer, had demanded the central government to extend export incentive of 5 per cent to exporters.
New Delhi: To curb steep fall in wholesale onion prices and protect farmers' interest, the Centre has further extended export sops on onion by three months till March 31 this year.
Wholesale prices fell by up to 42 per cent to Rs 7.40 per kg at Lasalgoan (Maharasthra), Asia's biggest onion market, during last month from an average Rs 12.80 per kg in the year-ago period on expected good production.
Maharashtra, the top onion producer, had demanded the central government to extend export incentive of five per cent to exporters under the Merchandise Exports from India Scheme (MEIS) for both fresh and stored onions, beyond December 31.
In the latest public notice, Directorate General of Foreign Trade (DGFT) said it "hereby extends the MEIS benefit at 5 per cent freight on board (FoB) for 'onions fresh or chilled' by further three months till March 31, 2017."
At present, the arrival of 2016-17 kharif (summer) onion is in the full swing not only in Maharashtra but also in other states like Karnataka, Madhya Pradesh, Rajasthan and Gujarat.
"Prices are under pressure because of increased arrival of the fresh kharif crop. Looking at the daily arrivals, it looks productivity is higher even though the acreage was lower," a senior Agriculture Ministry official said.
It may be noted that 20 per cent of the country's total onion output is grown during the kharif season. Since the kharif onion cannot be stored, farmers sell off the produce in domestic as well as overseas markets.
The arrival of quality onions has boosted exports in the last few weeks. About 13,56,381 tonnes of onions have been shipped abroad in the April-September period of this fiscal.
The government is still assessing onion production figures for the 2016-17 crop year (July-June). Last year, the country's onion output was higher at 20.99 million tonnes. Maharashtra contributes more than a quarter of the country's overall output.