India Insight

Pricey onions mean more tears for businesses, public

By Anupriya Kumar and Arnika Thakur

Onion prices recently reached 100 rupees per kilogram ($1.62) in some parts of New Delhi. It is hard to emphasize enough how prices like that are hurting businesses and the public. Onions are one of India’s staples, and people consume 15 million tonnes of them a year. Now, many people can’t afford to buy as many as they need – or any at all.

The government’s efforts to ease the price, which has quadrupled in some cities in the past three months, are unlikely to succeed. Heavy rains have reduced crop yields and delayed harvesting. Now, the average price of onions in India is 83 rupees per kilo, Delhi Chief Minister Sheila Dikshit said in an interview with Reuters published on Wednesday.

Here’s how the people are reacting to the “onion crisis”. (We have edited responses for clarity)

Surendra Anand, Anand Restaurant, New Delhi
Onions used to be about 15 rupees a kilo, they are 70 to 80 rupees now. They are expensive, but we can’t stop using them. We need onions to make gravy, and we can’t charge the customers for that. We are not reducing our usage, but it is affecting our margins.

Dipti Chandra, Ghaziabad
Yes, definitely it has hit our consumption. The raised prices have affected our monthly budget significantly. So we now try and add fewer onions to vegetables, and also prepare dishes with far less curry content.

Running rings around onion prices

(Any opinions expressed here are those of the author and not of Thomson Reuters)

The size and swiftness of the current price spike in onions has surprised everyone, even those who have been dealing with India’s most politically sensitive commodity for decades. How come retail prices have doubled in Mumbai in a week? Why did prices at Lasalgaon, India’s largest wholesale onion market, rocket 38 percent on Monday?

Sure, stocks are low after a drought last year in Maharashtra state, the top onion producer in the country. And there have been reports that this year’s crop is damaged in some pockets because of heavy rains – but that’s just a few thousand hectares.

It’s getting so bad that the government has had to cease its mantra of buy less, export more for other costly commodities and import onions for Indians to cook their classic dishes.

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