Mumbai - India has become so desperate for fresh stocks of the onions it uses in spicy curries that it is turning to regional rival China and sanctions-hit Iran for supplies, and there is even talk of airlifts to ease soaring prices.
But despite a swirl of high-level meetings last week, the government is unlikely to land imports in substantial quantities before state elections begin on November 11, with state-run companies struggling to clinch deals and private players risk-averse.
Indians eat 15 million tons of onions a year, using them as the base for traditional dishes such as biryani and bhaji. This has made high prices a hot potato that has in the past contributed to the fall of state governments.
Retail prices of onions have quadrupled in three months – now costing more than 100 rupees (R16) a kilogram, which is what a third of the population live on a day – as a supply squeeze caused by wet weather has hampered harvests.
Farm and food ministers met with Delhi Chief Minister Sheila Dikshit on Thursday to discuss ways to curb galloping prices in the Indian capital.
Onion prices were a major factor in pushing inflation to a seven-month high last month of 6.46 percent, and the government, led by the Congress party, is facing heated calls in the media to bring prices down.
India has never before imported onions by air but Farm Minister Sharad Pawar proposed just that on Wednesday because sea transport cannot replenish supplies as fast.
“The state-run agencies are floating import tenders, but supplies are likely to come only after three to four weeks,” said Changdev Holkar at the National Agricultural Cooperative Marketing Federation. “And quantity would be minuscule compared to demand.”
Private traders will not rescue the second-largest producer and consumer of onions because they know prices could quickly fall – farmers have planted far and wide to reap the benefit of high prices.
“Onions are highly perishable. Once you import, you can’t wait for prices to rise,” said Ajit Shah, the president of the onion exporters’ association. And even stopping exports will not help matters, because they have already shrunk to just a trickle.
“Our prices are too high. Buyers are switching to Pakistan and China,” said a Mumbai exporter. Indian onions cost $900 (R8 830) a ton whereas $570 will buy you a ton from China.
“Supplies from the new season crop will start in two to three weeks and that will depress prices,” Pawar said on Thursday. He may be disappointed, though. Heavy rains are expected this week in big onion-growing states. – Reuters