Govt cuts minimum export price for onion

India on Friday cut by $40 a tonne the minimum price at which onion can be exported from the country, aligning it with the fall in local prices and giving a thrust to exports.

The National Agricultural Cooperative Marketing Federation of India (NAFED), a government agency, had in February raised the minimum export price (MEP) by about 30 percent across regions, to discourage exports amid surging local prices.

"Now, arrivals have improved and prices have fallen across the country. So, we decided to reduce the minimum export price," a senior NAFED official said from New Delhi.

The new export prices, to come into effect on Sunday, differ from region to region. For instance, the MEP to the Middle East, a major buyer, would be $305, compared with $345 until March and $265 in early January.

Onion prices had shot up in India in early 2007 on lower arrivals and booming export demand from neighbouring countries. However, the government's export control and improving arrivals had brought down the prices again.

Wholesale prices in India's largest onion trading hub, Lasalgaon in Maharashtra state, have eased to Rs 500 a quintal, from 1,500 rupees in February. Retail prices have fallen from a peak of Rs 25 a kg to about Rs 9 in Mumbai.

"There is no shortfall of onion and it was necessary to cut the MEP," said, C B Holkar, Vice-Chairman of NAFED.

India, the world's second largest producer of onion, is expected to have exported an all-time record of 1.1 million tonnes in the year to March 2007, cashing in on output shortfall in neighboring countries, especially Pakistan.

However, the output is expected to fall to 5.5 millon tonnes in the current fiscal year, from 6.2 million last year, as heavy rains washed out part of the crop in western and southern India.

India tea exports rise annual 23.3% in January

Tea exports from India, the world's largest producer, rose 23.3 per cent in January from a year earlier to 13.77 million kg, the state-run Tea Board said on Friday.

Officials said rising overseas demand should keep sales high over the next few months, even as leading competitor Kenya overcomes a drought that hit their output and exports last year.

"We are tapping a lot in the emerging markets in Asia and Africa which should help us sustain this growth," Tea Association of India (TAI) spokeswoman Mridula Bhattacharya said.

Indian tea production in January fell 12.3 percent from a year earlier to 21 million kg, Tea Board officials said.

"Unfavourable weather conditions, especially with a drought-like situation prevailing in northern India, brought about this fall in production," Kalyan Basu, the secretary general of the TAI, said.

"There is no doubt with some rains production will catch up."

Exports reached 203.8 million kg in 2006, topping 200 million kg for the first time since 2002 mainly due to Kenya's drought and India's tapping of emerging markets, officials said.

In 2006, India exported 8.52 million kg of tea to Kenya, up from 1.54 million kg a year earlier.

"That will however change this year as Kenya seems to have overcome its problems," Basu said.

The bulk of India's exports in 2006 went to Iraq, Russia and the United Arab Emirates, officials said.

Tea production rose by 3 per cent to 955.9 million kg in 2006 from 2005 as good weather lifted production in the north, officials said.

"The outlook for both production and exports for the year remains good, despite increasing competition," Basu added.

Cap iron ore exports to 90MT: Industry to govt

In a move to keep more of the raw material at home, the Indian steel industry today demanded that the government place a quantitative restriction on iron ore export at 90 million tonnes for the current year.

"Iron ore export needs to be limited because there is a shortage in the supply of iron ore to the domestic steel industry," Moosa Raza, president, Indian Steel Alliance, today said at a press conference organised by industry body Assocham.

The industry has also asked for a 15% reduction in the cap on iron ore export every year until the exports are brought down to zero per cent. India currently exports 90-100 million tonnes of iron ore, mostly to China.

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