Friday, January 7, 2011

Onions becoming headache for India

India is trying to persuade Pakistan to resume full exports of onions, foreign minister S M Krishna said on Friday, as food inflation weighs on Asia's third-largest economy and fuels anger against the ruling coalition.Discontent over food inflation has been a major headache for Prime Minister Manmohan Singh who is struggling with a slew of corruption charges against his government, eroding its political capital from an impressive election victory in 2009. Last month, India abolished import taxes on onions after prices nearly tripled in a month.
"We have initiated talks and before not too long, we are hopeful we will find a solution to this, easing pressure within our country for onions," Mr Krishna told a press conference in Delhi

India's food inflation has risen for the fifth straight week this week to 18.32% - the highest in more than a year.
The price of onions, a key food staple for Indian families used in almost all dishes, has risen dramatically over the past month.
A kilogram which usually costs 20 rupees went up to 85 rupees ($1.87; £1.20) last month. At present, it is 65 to 70 rupees a kilo.

Unseasonal rains are officially blamed for pushing up prices of vegetables such as onions and tomatoes, but some commentators point instead to poor agricultural productivity and transport after years of few reforms and weak government investment

High prices of essential commodities such as onions have previously sparked unrest and helped bring down the national government in 2004.

Congress would drop around 40 of its current 206 seats, the AC Neilsen poll showed, as 44% of respondents said Singh's previously unimpeachable image had been affected by the scandals

An Indian labourer sits on the sacks of onion at a market in Ahmedabad on 21 December 2010 The price of onions has risen dramatically over the last month

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