The Indian government in a drastic move has increased the minimum of export price of onion to US$700 (RM2,870) per metric tonne to enure its availability in domestic market.

The move is likely to have an impact on onion prices in the next few weeks in Malaysia since a substantial amount of onions is imported from India.

India's Ministry of Consumer Affairs, Food and Public Distribution on June 25 had increased the price from US$250 (RM1,025) to US$425 (RM1,742) per metric tonne.

The ministry in an announcement stated that the prices of onions have been rising mainly due to a decline in total production from 18.9 million tonnes 2014-15 compared with 19.4 tonnes in 2013-14.

This is a decrease of 479,000 tonnes.

The ministry blamed the the shortfall primarily on account of adverse weather conditions including unseasonal rains which had impacted both the standing and harvested crops at the major producing centres.

In order to contain the price rise of essential commodities especially here in the capital New Delhi and other major cities, a National Consultation Meeting was held recently to discuss controlling prices of essential commodities, especially onions.

The meeting also recommended effective action against hoarding and black-marketing to control prices of food items.

In a related development, with retail prices of onion hitting 100 Indian rupees (about RM6) a kilo in some parts of the country, the Indian government decided to import 10,000 tonnes of onions to stabilise the price with bad
weather expected to last till the end of September.