Onion Prices Stir Up Trouble Ahead Of State Elections

onion-prices-stir-up-trobulOnion prices have climbed sharply following a drought, a worry for the Government as it heads into state elections that have been known to turn on the cost of the vegetable. Prices have more than doubled in the last three months and no respite is in sight. Supplies remain tight as low rainfall has cut sowing and curtailed growth of individual bulbs. Indians eat their way through 15 million tonnes of onions a year, using them as the base for traditional dishes such as biryani and bhaji and making them a hot political issue and a kick to inflation when the price rises.
“I don’t understand how suddenly prices skyrocket. I have to buy at whatever price vendors are asking. I can’t buy less just because prices are high,” said Pooja Kadakia, 28, a housewife shopping in central Mumbai. Further increases look likely, with food inflation running in double digits.
“Planting is down in all the major producing states. There is severe water scarcity in Maharashtra, Gujarat and Karnataka,” Satish Bhonde, a director at the National Horticultural Research and Development Foundation, told Reuters. Bhonde predicted a 10 percent drop in production from last year. India produced a record 17.5 million tonnes in 2011/12. Relief could come with the new crop in October, but the Government faces 10 state elections this year and needs a good summer monsoon. National elections are due next year.
The opposition Bharatiya Janata Party (BJP) will be sure to use rising prices against the Congress party-led Government in the campaigns. In 1998, the BJP suffered heavy losses in a key state poll, a result widely blamed on high onion prices. “The recent political history shows onion price rises go against the ruling party,” said Jaidev Dole, an analyst at Marathwada University in Maharashtra. “The Government is already unpopular … the onion price rise may be the last straw that breaks the camel’s back.”
Source : Reuters

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