News / Economy

Spiraling Onion Prices Worry Indian Government

An Indian laborer carries a sack of onions at a warehouse in Jammu, India, August 22, 2013.
An Indian laborer carries a sack of onions at a warehouse in Jammu, India, August 22, 2013.
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Anjana Pasricha
— In India, the government will import onions to ease spiraling prices of a crop that is an essential ingredient in Indian cooking. Seen as a symbol of high food inflation, the price of the "humble" onion has turned into a political headache for the government.

Krishna Chopra has been coping with rising food prices for many months, but her anger has intensified since she began shelling out $1.25 for a kilogram of onions - about four times their usual price.

“I am upset at the price of onions," she admitted."For a normal person it is almost impossible to buy. And personally, even if I can afford it, I have reduced my consumption of onions." 

Used to make the famous Indian curry, onions are an indispensable item in virtually all Indian dishes. It is regarded as the most affordable item on the table - a vegetable within the reach of even the poorest person.

Little wonder then that the runaway onion prices have made headlines and become the subject of animated television talk shows. The expensive onion even prompted a highway robbery last weekend, when a truck carrying 9,000 kilograms of onions was hijacked by two men. It was later intercepted by police. The loot: worth an estimated $10,000.

Hoarders

The government said there is no shortage. It blames rising prices on traders, accusing them of hoarding stocks to push up prices. It said it will import onions from Pakistan, China, Iran and Egypt to ease pressure.
 
That is not placating the public, who see the expensive onion as a symbol of persistent high food inflation in recent years. An independent political commentator in New Delhi, B.G. Verghese, blames the problem on poor food management. 

“Food prices have gone up, everyone feels that, basic sugar, rice, wheat, milk, vegetables, the whole works. It is a chain reaction, part of general inflation, partly because of shortages, partly because of artificial shortages created by hoarding as in the case of some vegetables and so on,” Verghese said. 

Cashing in

India's main opposition Bharatiya Janata Party hopes to cash in on voter disgruntlement over high onion prices as it gears up for state elections due in Delhi later this year. Onions have become the centerpiece of their campaign to slam the government for mismanaging the economy and failing to protect the interests of poor people. To woo voters, it has set up stalls to sell onions at rates significantly lesser than the market price in New Delhi.

Political commentator Verghese admits onions are a “political heavyweight." But he said as prices reduce following imports, they may fade from public memory during local elections this year and national elections next year.  

“There are so many issues that I don’t know whether onions will be leading the charge. People will be talking about more enduring issues, corruption, misgovernance, lack of governance, so many other things that are worrying,” said
Verghese.

But the government has reason to worry about the humble commodity.  High onion prices helped former prime minister Indira Gandhi wrest back power in 1980, and they were largely responsible for the defeat of the Delhi state government 15 years ago.

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