India is trying to persuade Pakistan to resume full exports of onions, the foreign minister 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.
Pakistan banned overland exports of onions to India on Jan. 4 with traders saying they feared shortages in Pakistan. Exports by sea are allowed, but much of the trade used to be by cheaper and quicker road and rail.
“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.” Indian Foreign Minister S. M. Krishna said in New Delhi.
His ministry later said the matter had been taken up with Pakistan. “We hope that it can be resolved,” it said.
The price of onions, a staple for Indian families who use them in almost all dishes, rose more than 23 percent over the week to Dec. 25.
Soaring onion prices have helped dislodge state governments in the past and rising food costs often spark street protests.
India’s food inflation rose for the fifth straight week to the highest in more than a year this week, reinforcing fears it has spilt over to broader prices and cementing expectations of a January interest rate rise.
Unseasonal rains have been blamed for pushing up prices of vegetables such as onions and tomatoes, but some commentators point to poor agricultural productivity and transport after years of minimal reform and scant government investment.
The deputy chairman of India’s Planning Commission, Montek Singh Ahluwalia, told Reuters in an interview the recent spurt in food inflation was because of supply constraints but prices should cool by February.
The UN Food and Agriculture Organisation said on Wednesday global food prices hit a record high last month, above 2008 levels when riots broke out in countries as far afield as Egypt, Cameroon and Haiti.
In a sign of possible voter anger over high prices and corruption, a poll published on Friday showed India’s ruling Congress party would lose its majority if an election was held now.
Congress would lose about 40 of its 206 seats in the 545-seat lower house of parliament, the AC Neilsen poll showed, as 44 percent of respondents said Singh’s previously unimpeachable image had been affected by the scandals.
The Mood of the Nation poll, conducted by AC Neilsen and India Today magazine, surveyed 12,349 voters across 19 states in face-to-face interviews between Dec. 4-19.
The government has ordered raids on onion traders to stop hoarding.