Tears as India's soaring onion cost poses challenge for Modi

GMT 13:01 2015 Wednesday ,09 September

Arab Today, arab today Tears as India's soaring onion cost poses challenge for Modi

A crying shame, the cost of India's staple vegetable soared
New Delhi - AFP

A leap in onion prices has left a bitter taste for Surinder Anand, owner of a New Delhi restaurant that sweats its way through a hundred kilos a day, but it could pose even bigger problems for India's leader.

The cost of India's staple vegetable -- an essential ingredient in curries and eaten daily by almost everyone -- soared in August to an eyewatering 60 rupees (90 US cents) a kilo on wholesale markets, up from 25 rupees in June.

"It's impossible to cook without onion, and we can't increase the cost of our dishes or customers won't come, so it all comes out of our pockets," Anand said.

Volatile vegetable prices are a perennial problem for India's leaders, but the humble bulb is particularly sensitive, and the recent spike is the biggest since Prime Minister Narendra Modi took power 15 months ago.

Unseasonal rains are named as one reason for the current shortage, sparking floods that destroyed crops earlier in the year -- while others blame the summer monsoon for disrupting supply.
Dark editorials in the Indian press, meanwhile, point to a shady network of unscrupulous hoarders conspiring to stockpile onions, artificially pushing up prices.

It all comes as Modi prepares for crucial elections in the northern state of Bihar, one of India's poorest, where the prices of the staple food are highly sensitive.

Onion prices delivered Modi's Bharatiya Janata Party (BJP) a stinging defeat in Delhi Assembly polls in the late 1990s -- a result he is eager not to repeat in Bihar.

They are also credited with winning the rival Congress Party the "Onion Election" in 1980, although economists say politicians are now more alert to the potential flashpoint than in previous decades.

"Onions tend to be sensitive as there has been a history of onion prices worrying governments," Shubhada Rao, chief economist at Yes Bank in Mumbai, told AFP.
"In 1998 they shot up and the (New Delhi) government lost power and since then, governments have become wiser in terms of proactively handling such crises and taking action."

The Bihar state elections are important because success would give Modi's BJP the extra seats in the upper house he desperately needs to help him push through promised reforms.

- 'No government support' -

While Modi's administration has moved to address the shortage, raising the minimum export price by 65 percent to $700 a tonne in August, some say it has not gone far enough.

"There is no government support," said Nawal Shah, owner of Sonali Provision, a small grocery store in Patna, the capital of Bihar state.

"The state should have gone cracking down on the hoarders and released tonnes of onions that were kept out of the market."
Tarkeshwar Kumar, who owns a small restaurant in Patna, said the price rise had a "huge" impact on his business.

"I cannot pass on the price hike on to the consumers and I cannot do without onions," said Kumar, who has started using magaj, a paste made from cashew nut and poppy seeds to flavour curries, and serving cucumber salad instead of onion.

"Things get nasty with some of the more demanding customers," he said.

In ordinary kitchens too, the shortage of the  commodity is acutely felt.

"I reduced the quantity of onions I buy to half a kilogram from one kilo," said Usha Gupta, a Bihar housewife and mother of six.

"Making a tasty dish without onion is very difficult; items like egg curry and chicken require a lot of onions," she said.

At the heaving Okhla Sabzi Mandi wholesale market in New Delhi, mountains of red and purple onions glisten in the mid-morning sun -- a fresh sign of government action.

Traders say they are imports ordered from Pakistan, Afghanistan and Iran in the past few days to ease the strain on prices.

But while the imports may calm the market, Mohammad Akram, an onion wholesaler who sells 300-400 sacks a day to retailers and restaurants, says they may bring their own complaints.

"The Indian onions have much more flavour, they are the traditional varieties that people like," Akram said.

"The ones imported from other countries -- Pakistan, Afghanistan -- they are not so tasty."


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