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India traders 'cheating consumers' with onion prices

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(GlobalPost/GlobalPost)

India's ruling Congress government has accused traders of cheating consumers as it struggles to reduce the cost of the vegetable known as the "poor man's food" ahead of a string of state polls.

The price of onions, a staple in Indian cooking, have gone through the roof in the past few months, quadrupling to as much as 100 rupees a kilogram ($1.65) in parts of the country and turning the vegetable into an unaffordable luxury for the poor.

Traders are "cheating consumers," Food Minister K.V. Thomas said in remarks aired Saturday, appealing for onions to be sold at "affordable rates".

They "should not loot consumers", he added.

The politically sensitive rise in the price of onions comes ahead of five regional assembly polls in November and December, seen as a dress rehearsal for general elections due by May 2014.

The Congress-led government has been struggling to curb imports to counter a record current account deficit, the broadest measure of trade.

But such is its alarm as the state elections near that it plans to import import thousands of tonnes of onions to reduce prices.

India is the world's second-biggest onion grower after China and normally exports onions, but it has floated a tender to import onions to check the spiral in prices.

The state-run National Agricultural Cooperative Marketing Federation of India (NAFED) "is interested in importing onions of Pakistan, Iran, China and Egypt origin", the co-operative said in the tender issued earlier in the week.

NAFED expects to take a decision on the onion tender next Tuesday, Thomas said.

But supplies from abroad may take weeks to arrive, commodity experts say.

The ruling Congress party fears a backlash from the "aam admi" or "common man", its main voter-support base.

"The sky-high prices of onions have given the opposition a potent weapon to attack the government with," commented the Hindustan Times newspaper recently.

Costly onions have a history of political fallout, with the Hindu nationalist Bharatiya Janata Party (BJP) being ousted in 1998 Delhi state polls after surging onion prices soured the voter mood.

In January 1980, the late Congress leader Indira Gandhi rode back to power on the back of rising onion prices, waving huge strings of them at campaign rallies and saying that a government has no right to govern if it cannot control onion costs.

The latest onion price rise has also come in the middle of India's most important religious festival season, an occasion for multi-day feasts and family dinners.

"We always use onions in our cooking but they are something special for us now," Pinky Singh, a domestic servant, told AFP.

The government blames the steep price rise on middlemen who hoard onions, and extended rains in onion-growing areas that damaged crops.

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http://www.globalpost.com/dispatch/news/afp/131026/india-traders-cheating-consumers-onion-prices