Why India’s onions are rattling global food markets
Semafor Signals
Insights from The Daily Star, East Asia Forum, and the BBC
NEWS
Indian authorities banned the exports of onions last week, and restricted exports of other agricultural goods including rice, sugar, and wheat, in an effort to control its supply and lower inflation.
The moves have rattled global markets and led to increases in food prices in countries that rely on Indian goods.
SIGNALS
Neighboring countries hit hard
Onion prices in Bangladesh went up nearly twofold overnight as traders began stockpiling the vegetable in the wake of India’s export ban, according to The Daily Star, the country’s largest English daily, which noted that rising food costs and inflation “have already been making it harder for people to make ends meet.” Nepal, Bhutan, Sri Lanka, and the Maldives have also reported price hikes, The Wire reported, and customers are bearing the burden. “Traders are setting prices at whim. There is no remedy for us,” a Bangladeshi shopper said.
Political considerations at play
Indian officials implemented the controls to curb inflation ahead of the country’s general elections early next year, analysts told The Financial Times. “Domestic politics always wins over economics or even international prices,” an agricultural economist said. The political stakes also make Prime Minister Narendra Modi’s government less likely to turn to other countries to import food and increase supply, an executive at a New Delhi-based research institute argued, as “questions would arise about why a self-sufficient India is dependent on imports.”
Grammy-nominated Modi promotes millets
As Indians face rising prices and food insecurity, the government has focused on increasing the production of millets, a sustainable and nutritional grain that became less common in India after the Green Revolution in the 1960s. India then led a push at the UN to declare 2023 the “year of the millet” to increase global production and combat hunger. To bring attention to the issue, a Modi speech about millets was featured in a song, earning the prime minister a Grammy nomination for Best Global Music Performance.
