Jagir Singh has sold red onions at a market in
South Delhi every day for the past half-century.
Perched on an upturned crate, wrapped tight against
the chill air, he offers pyaz, a staple for much Indian
cooking, for 60 rupees a kilo, the most he can
remember. Business is brisk but most customers pick
up only a small handful of onions. That is just as
well—wholesale supplies are tight, he says, and the
quality is poor.
As India’s economy grows by some 9% a year,
food prices are soaring. In late December the commerce
ministry judged that food inflation had reached 18·3%,
with pricey vegetables mostly to blame. Officials have
made some attempts to temper the rise in the past
month-scrapping import taxes for onions, banning
their export and ordering low-priced sales at
government–run shops. But there is no quick fix.
Heavy rain in the west of India brought a rotten
harvest. Vegetables from farther afield including a
politically sensitive delivery from a neighbouring
country—are costly to move on India’s crowded,
potholed roads. Few refrigerated lorries and poor
logistics mean that much of each harvest is wasted.
Newspapers allege hoarders are cashing in.
The biggest problems are structural. Food
producers, hampered by land restrictions, archaic
retail networks and bad infrastructure, fail to meet
extra demand from consumers.
It was estimated in October that a 39% rise in
income per person in the previous five years might
have created an extra 220 million regular consumers
of milk, eggs, meat and fish. Supplies have not kept
up with this potential demand.
The broader inflation rate may be a less
eyewatering problem than the onions suggest. The
central bank has lifted interest rates steadily in the
past year and is expected to do so again later this
month. Headline inflation fell to 7·5% in November,
down by just over a percentage point from October,
though it is still above the central bank’s forecast of
5·5% for March.