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Onions drive Indian consumers to tears

Onion prices more than quadruple since June, hitting poor and middle class families already struggling with steep inflation. Samanth Subramanian reports
A labourer spreads onions for sorting at a wholesale vegetable market in the northern Indian city of Chandigarh. Heavy rains have damaged onion crops and delayed harvesting, putting further upwards pressure on prices. Ajay Verma / Reuters
A labourer spreads onions for sorting at a wholesale vegetable market in the northern Indian city of Chandigarh. Heavy rains have damaged onion crops and delayed harvesting, putting further upwards pressure on prices. Ajay Verma / Reuters

NEW DELHI // The humble onion is driving Indian consumers to tears in an entirely new way. Onion prices have more than quadrupled since June, hitting poor and middle class families already struggling with steep inflation.

Retail prices for onions are approaching 100 rupees (Dh6) per kilogram, up from 20-25 rupees during the summer.

“It’s crippling,” said Mohammad Hussain, the proprietor of a small eatery in south Delhi. “I used to put out little dishes of sliced raw onions and green chillies whenever I served a customer.”

Despite complaints from his customers, Mr Hussain gave up this practice a month ago. “I put out sliced radishes now. It’s not the same thing at all, and the radishes aren’t very good, but what else can I do?”

Rising food prices drove inflation to 6.46 per cent in September – a seven-month high, but it is the cost of onions in particular – a staple of Indian cuisine – that is worrying the government as five state elections loom in the next two months.

On Saturday, K V Thomas, the food minister, urged onion traders to bring down their prices to “affordable rates”, arguing that they were “cheating consumers”.

The federal government also plans to import onions from Pakistan, Iran, China or Egypt, according to a tender floated last week.

Any imports, however, would take a month or more to reach India by ship. The agriculture minister Sharad Pawar last week floated the more lavish idea of bringing onions in by air. But the quantity of any such onion airlifts would still fall far short of demand.

The chief minister of Delhi, Sheila Dikshit, seeking re-election in December, told reporters on Saturday that onion prices had hit even her household budget, forcing her to use the vegetable only sparingly.

“We are doing everything possible to contain the rise in onion prices,” Ms Dikshit said. “Ours is a sensitive government and that is why we are concerned about the hike in rates.”

Nandita Iyer, a food writer based in Bangalore, said the onion was part of the basic diet of much of the country. In rural India, even in the absence of other food, people eat flatbreads with raw onions and green chillies, she told The National.

“It’s almost as basic as salt, and it is expected to be affordable by all, unlike say carrots or bell peppers, the prices of which regularly spiral out of control,” Ms Iyer said

“The main reason for outrage over onion prices is that something as basic as onions or salt should be easily within everybody’s reach. If the masses can’t buy something this basic, then they surely cannot afford anything else.”

India is the world’s second-largest cultivator of onions and usually has a surplus that it exports.

This year, onion production dropped by 5 per cent, largely because of extreme weather in onion-growing regions. But the corresponding drop in the amount of onions reaching the market has been much higher: in June and July, there were 20-40 per cent fewer onions than usual, according to government data.

The causes behind this scarcity remain unclear. In August, Mr Thomas accused traders of hoarding onions and artificially driving up prices. A report by the Institute for Social & Economic Change in Bangalore, released earlier this year, identified a complex network of traders and middlemen among whom collusion and price-fixing were common.

“A few big traders having well connected networks with market intermediaries in other markets seem to play a major role in hoarding for expected high prices,” it said.

The cost of onions has had political ramifications in the past. In 1998, the then chief minister of Delhi lost elections, analysts said at the time, in part because onion prices spiralled upwards just before the election.

In 1980, Indira Gandhi became prime minister after making onions a theatrical centrepiece of her campaign rallies, arguing that the government then in power deserved to be voted out for allowing onion prices to shoot up.

The current price has even inspired some moments of absurdity.

In August, robbers on the motorway between Delhi and Jaipur hijacked a lorry carrying 40 tonnes of onions. Last Tuesday, police in Mumbai caught two thieves trying to steal five bags of onions, weighing nearly 300kg.

Last month, the Indian arm of the American discount website Groupon offered 22,500kg of onions at 9 rupees a kilo – a price last seen in 1999. At the peak of the rush for this deal, Groupon sold 3,000kg of onions in less than 10 minutes.

ssubramanian@thenational.ae

Updated: October 29, 2013 04:00 AM

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