Government on Thursday decided to lift ban on export of onions after its prices almost crashed in the domestic market, which triggered farmers’ protest.

The decision to this effect was taken by an Empowered Group of Ministers (EGoM) on Food headed by Finance minister Pranab Mukherjee.

The government had banned onion export in the last week of December, 2010 to augment domestic supply and contain rising onion prices, which had touched Rs 70-80 per kg then.

The ministers’ panel, as a precautionary measure against possibility of price shooting again, decided to allow shipments of onions at a Minimum Export Price (MEP) of USD 600 (About Rs 28,000) per tonne, a senior government official said after the EGom meeting.

To dissuade onion exports, the government had raised the MEP from the previous level of USD 525 per tonne to USD 1200 per tonne.

Later the exports were completely banned.

Prior to the ban, India exported 11.58 lakh tonnes of onions mainly to gulf countries, Sri Lanka and Malaysia during April-November of this fiscal.

The EGom met in the absence of Agriculture minister Sharad Pawar, Food minister K V Thomas and Commerce minister Anand Sharma.

The meeting was attended by Defence minister A K Antony, Home minister P Chidambaram and Deputy Chairman of Planning Commission Montek Singh Ahluwalia.

Government’s decisive steps against hoarders and arrival of fresh crop reversed the situation within 45-50 days with prices of onions declining substantially.

Currently prices of the kitchen staple have crashed to Rs 4-12 per kg in the wholesale markets of Nashik, the main onion growing area, which led to agitation by farmers who demanded lifting of ban on its exports.

The government had last week lifted export ban on two varieties of onions–Bangalore Rose and Krishnapuram–grown in Karnataka and Andhra Pradesh.

Opening of onion exports came within days of Agriculture minister Sharad Pawar and Maharashtra Chief Minister Prithviraj Chavan approaching Commerce Minister Anand Sharma to lift ban on onion export following farmers’ stir in Nashik against crashing prices.