The Canary In The Coalmine: India Lifts Export Ban As Onion Prices Plunge

Indian worker arranges onions

Photo: AP

The Indian government has lifted its ban on onion exports after prices plummeted to Rs 4 – Rs 12 a kilogram (approximately 9c – 27c per 2.2lbs) in part of the country, according to The Hindu. Prices had hit Rs 70 – Rs 80 per kilogram in December.The Empowered Group of Ministers (EGoM) on Food approved shipments of onion at $600 a ton after farmers began protesting the drop in prices.

Remember, the government banned onion exports in December when prices peakedĀ  and were to heavy a burden for India’s 650 million poor who live on about Rs. 91 a day. The surge in prices in December presaged the latest obsession with food prices, and now it’s going the other way.

Food inflation eased to 11.05% in the week ending February 5 after rising to 18.32% in December. Though vegetable prices eased, they remained 24% higher than a year before.

A Barclays economist in Singapore believes food prices have peaked and rise in Asian food prices were due to one-off reasons, according to MarketWatch but the World Bank is still concerned about food prices. It released a report this week saying food prices had pushed 44 million people to poverty in developing countries.

The World Bank’s Food Price Index went up 15% between October 2010 and January 2011 with wheat and corn prices rising the most.

World Bank Chart

Photo: World Bank

Meanwhile, wheat prices in China dropped 3.6% despite its winter drought, ABC News reported, easing concerns about global wheat supplies. With favourable harvests sub-Saharan Africa is less exposed to the global food crisis but countries like El Salvador and Haiti in Latin America and the Caribbean.

Oh, and in Malaysia, palm oil futures are falling.


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