How rising onion prices may hurt PM Modi's govt more than tomatoes | Explainer
₹60 a kg. Despite her best efforts at setting up Fair Price Shops, and quashing rumours about the scarcity of onions, there was no coming back for her as Delhi's CM. Stable food prices are crucial for PM Modi, who will seek a third five-year term in national elections next year.
Retail inflation is running at a 15-month high, underscoring the scale of the challenge. The government has curbed exports of wheat, rice, and sugar, and may scrap a 40% tariff on wheat imports. It’s selling tomatoes and grain in the open market and curbed stockpiling of some crops.
According to the Bloomberg News agency, an El Niño-induced spell of poor weather may hurt onion crops in the top-growing state of Maharashtra, where precipitation is already below average. Monsoon rains overall in India have been about 7% below normal, helping push up food prices. Wheat has risen 12% in Delhi from a year earlier.
Rice costs 22% more, tomatoes are up 80%, while onions have increased 32%. Maharashtra is the country’s top producer of onions, accounting for more than 40% of output. They are grown three times a year, twice in the rainy season and once during winter.
Read more on livemint.com
