India Urges Pakistan to Resume Onion Exports

As Reported by The BBC

India is trying to persuade Pakistan to resume exporting onions overland to curb soaring prices. The matter has been taken up with the government of Pakistan, External Affairs Minister SM Krishna said.

Pakistan banned overland exports of onions to India on Tuesday with traders saying they feared shortages at home. 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.

Pakistan banned exports to India through the land route via the Attari-Wagah border crossing, although the sea route is still open. Much of the trade, however, is by road and rail which are cheaper and quicker.

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.

The rise has been blamed on unusually heavy rains in the bulk-producing western states of Maharashtra and Gujarat and in southern states, as well as on hoarders and speculators.

Discontent over food inflation has been a major headache for the government.

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

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