India suspends exports of onions as prices surge

NEW DELHI, December 20, 2010 (AFP) – India suspended exports of onions, a key food staple, on Monday after prices of the vegetable soared, adding to the government’s inflation woes. Prices of onions — commonly used to add flavour to Indian food — have surged in the past few days to up to 80 rupees a kilogram (80 cents a pound) in many markets across the country from 35 to 40 rupees.

The government said in a statement it had decided to stop issuing export permits until at least January 15.

Trade Minister Anand Sharma told reporters the suspension would remain in effect “until the domestic situation improves”.

The price of onions is a sensitive political issue in India with voters in 1998 throwing out the Hindu nationalist Bharatiya Janata Party (BJP) in Delhi’s local elections due to its inability to control soaring costs of the vegetable.

Government officials were considering opening special outlets to sell onions at wholesale prices, the Press Trust of India reported.

The government attributed the sharp rise in onion prices to “hoarding and speculation” as well as to a supply crunch stemming from unseasonably heavy rain in the west and south of th