India unrest fears as onion price soars
● Onion prices in India have soared to eyewatering levels, leading to worries about food inflation and consumer unrest amid declining availability of one of the country’s most important vegetables.
Extreme heat earlier this year followed by excess monsoon rainfall has led to a drastic fall in production in India’s key growing areas. Wholesale onion prices at Azadpur, a leading hub for onion traders near New Delhi, have jumped by almost 500% from the start of the year to Rs1,908 (R394) for 40kg after soaring to a six-year high of Rs2,400 in April.
“Prices are rising and rising,” said Sachin Gangawani, a vegetable vendor in a Mumbai market. “People, instead of buying a kilo, they’re buying a quarter kilo.”
India has two annual onion harvests. The first of this year was devastated by a severe drought, with production down 50% from 2018. The second crop, now being harvested, was damaged by heavy rains during the monsoon, leading to lower planting and production as well as quality. With rains still continuing, there were now worries about next year’s harvest as the seedlings available are of poor quality.
The sharp rise in onion prices is an unwelcome development for Prime Minister Narendra Modi, coming at a time when his government is struggling to address a steep economic downturn.
The economy’s growth rate has fallen to a six-year low, cutting into the income of rural farmers and urban consumers alike.
Faced with rising prices, the government has been releasing its national buffer stocks of 50,000t into the market.
In late September it placed a limit on stocks held by traders to prevent hoarding and banned onion exports.
Earlier this month, it pledged to import 100,000t of onions.