Pakistan - India

India desperate for onions after Pakistan export ban

Reuters/Krishnendu Halder

India said Friday it would try to reverse a decision by Pakistan to stop overland onion exports to India. Pakistan is aiming to curb soaring prices for the staple. India, where the price of onions is higher than in Pakistan, eliminated customs duties last month, making the market very attractive.

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Pakistan stopped truck and train exports in a bid to keep the onions for domestic consumers who have been complaining about high prices, the commerce ministry said. Exports of onions to India by sea, however, have not been restricted.

The cost of onions has shot up recently in both countries. India’s poor harvests have created a demand from its neighbour, where onion prices have more than doubled. The problem has been made worse by a lower-than-normal harvest in Pakistan as well.

Some vegetable traders in northern India said they had stopped their exports to Pakistan in retaliation to the ban.

Reacting to the move on Friday, Indian Foreign Minister SM Krishna said New Delhi was attempting to reverse the Pakistani decision.

"We are in touch with Pakistan and we are hopeful that we will find a solution to this, and which will ease the problem," he told reporters.

The ban will not help relations between India and Pakistan, which are slowly trying to revive a stalled peace process.

And the Indian government is well aware of the effect of onion prices on public opinion: the soaring cost of onions in 1998 – six times normal – was held partly responsible for the electoral defeat of the ruling Delhi state government.

On Thursday, the commerce ministry said food inflation over 12 months had jumped for the fifth straight week, to 18.32 per cent for the week ending 25 December.

Onion prices soared about 23 per cent over the week, while the cost of fruit, eggs and meat also increased.

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