Onion price surge Roils India

NEW DELHI – the political power of the simple bulb see.

The root vegetables is the cooking ingredient for hundreds of millions of Indians, primarily through a wide belt of the subcontinent's populous North. Legendary status for not only delicious base of curries, but also a Slayer by Governments, after a dramatic rise in 1998 was credited to determine that the elections in Delhi and another State has acquired.

Today its power as a political hot potato has a sharp price rise recently appeared again. The harvest has mainland with an important area of production of about 16%, onion growing strongly non saisonale rainfall in the Western States, the affected according to Government estimates. The price of a kilo (2.2 lbs) of onions in the vegetable market has about 70 rupees ($1.55), almost five times the normal price and about the same price as the upscale mango jumped.

Reuters an Indian bear a Garland of bulbs protests food prices in New Delhi.

The Onion's price surge has also come to symbolize broader problem: rising prices for all Staples including tomatoes, lenses and garlic, take a heavy financial toll on India's impoverished masses.

On the paper, toll seems less than the popular revolt hits. Onions represent only 0.18% of the wholesale price index, India's benchmark rate of inflation. According to this index, still not food prices also rises quickly recently how it earlier this year - jump of 6.1% in November, were, compared with an increase of 10% in October.

Some experts claim even is little cause for concern. Subir Gokarn, Deputy Governor who said Central Bank, Reserve Bank of India, the nation Wednesday that the onion price increase will be "quickly rectified either by a new cycle of the crop come or import immediately."

But the Onion's power as a political symbol trumps pure economics. Its recent price rise has dominated the news for the last two days. "Ever had Biryani without onions?" cried the headline on Wednesday's front page of the Mumbai-based tabloid midday.

Manan Vatsyayana/AFP/Getty Images A vegetable vendor weighed onions for customers in a wholesale market in New Delhi, February 17, 2010.

The Government reacted as if this were a national emergency. Earlier this week it prohibited exports for a month. On Wednesday it this prohibition indefinitely extended and scrapped customs duties on imports of onions, asking to import State-run trading agencies.

Rahul Gandhi, Secretary General of the ruling Congress Party wanted to reassure the nation. "We want to ensure that prices be reduced" the Prime Minister, leave it, "he said, according to the news channel NDTV."

Prime Minister Manmohan Singh, Office has released for its part, the Minister of agriculture the steps required to bring a letter from the Prime minister's onion prices down accordingly late Tuesday asked.

India is also looking to his regional rival Pakistan relief. Pakistani reseller plan to export from 2,000 to 3,000 tons onions to India, meet the lack and have already exported around 1,000 tonnes in the last few days, said Abdul Wahid, a member of Pakistan's fruit and vegetable exporters Association.

The Government interest not without reason. "If the Government elections anytime soon face, it certainly damage would receive," said S. Chandrasekharan, Director of the New Delhi based think-tank South Asia analysis group, although he added that the Government could not long term be damaged because "The public memory is short."

The next big state elections are to take place mid-2011.

Mr Singh's Government already heavy criticism of the recent revelations of a public auditing Agency faced an allocation of wireless telephone favors range in 2008 a few companies and causing a loss of as much as $40 billion in potential revenue for the Government. The main opposition party manages Bharatiya Janata Party and others throughout the winter session of Parliament, interrupting, ended last week and have vowed to stay on the attack in the coming months.

The Onion's price rise has added another powerful weapon to the BJP's arsenal. Prakash Java Dekar, a spokesman for the BJP blamed Wednesday the onion price rise on Government mismanagement and hoarding of traders.

Manish Tiwari, a spokesman for the Congress Party, said the Government is doing everything in his power to bring the price down.

This reduction can be done early enough for many households, and onion seller. At Okhla vegetable market in Delhi on Wednesday defendant onion vendor Mohammed Chahvan used until last week daily about 30 bags to sell each containing 65 kg onions. In the past two days has approximately 10 bags sold, he said.

K. Banerji, 71-year-old customer, said he was angry with the inability of the Government to control the onion price. "While onions and garlic key elements are in Indian households, I can't believe that the country short of stock," he said. "Since March we have heard that prices will fall, but nothing has been done."

Others are cheaper alternatives find. Dayal Singh, Manager at code restaurant, cuisines to radishes in courts, said to try a Delhi has switched to replicate a pungent onion effect. "We have to wait until the prices of at least 40% of the current level to get back to our usual offer come out", he said.

Write toRomit Guha romit.guha@dowjones.com and Abhrajit Gangopadhyay at Abhrajit.gangopadhyay@dowjones.com

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