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Soaring onion price poses challenge for Modi

Soaring onion price poses challenge for Modi

NEW DELHI: 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 soared in August to an eye-watering 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.

Published in Dawn, September 10th, 2015

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