Underpriced exports to UAE
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Context
- The Centre has permitted 24,400 MT shipments to the UAE amid a ban on exports ‘till further orders’; exporters allege selling price is being set too low, triggering windfall profits for selected UAE importers
Details
- To check runaway onion prices, the government imposed a minimum export price (MEP) of $800 per tonne from 28 October to 31 December 2023.
- In August, the government imposed a 40% duty on the export of onions to improve supplies of the staple vegetable in the domestic market until 31 December 2023.
- On 8 December 2023, the government banned the export of onions till 31 March 2024. This has been extended indefinitely. The DGFT notification said the export of onions will, however, be allowed on permission granted by the central government based on requests made by the countries.
- Now that the government has allowed exporting the of onions suddenly, the exporters are protesting because the exporters are being paid a low price.
- Indian traders have alleged that while Indian farmers were paid ₹12-15 a kg for the onions, importers in UAE sold these onions in stores for over ₹120 per kg
Why were the onion exports banned?
- Tight global supplies and a dry spell induced by the El Niño weather phenomenon prompted the government to restrict onion exports during the 2023-24 financial year
Impact of the ban
- Following India’s export ban, global onion prices have shot up in recent months to about $1200-$1500 a tonne.
- Thus the UAE had demanded that the export ban be lifted.
- Onion shipments to UAE are being channeled through the National Cooperative Exports Limited (NCEL) on a government-to-government basis.
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National Cooperative Exports Limited (NCEL) National Cooperative Exports Limited (NCEL) was set up by The Ministry of Cooperation under the Multi-State Cooperative Societies (MSCS) Act, 2002. NCEL will provide a complete ecosystem for the promotion of exports mainly of agri commodities for the benefit of our farmers, in which India has a comparative advantage. The NCEL has provision of two kinds of members, as per details given below: i)Ordinary Members: The following shall be eligible to become ordinary members of the NCEL: -
No individual shall be eligible to become an ordinary member of the NCEL. ii)Nominal or associate member: The society may, in the interest of the promotion of its business, admit any person, including cooperative banks, as a nominal member or associate member by the provisions of the Multi-State Co-operative Societies Act on payment of a non-refundable fee of {₹1,00,000/- (Rupees one lakh only). |
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PRACTICE QUESTION Q. Consider the following statements about “'National Cooperative Exports Limited (NCEL)”
How many of the above statements is/are correct?
Answer- A |
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