| PACHORE WANI, India, July 9
PACHORE WANI, India, July 9 Indian farmer
Ranganath Watpade made a killing last year by putting off
selling his onions until four months after he harvested them.
This year, the same trick has backfired.
The country has produced a record harvest, but many farmers
in the onion bowl of India's western state of Maharashtra have
lost a large share of their crop damaged in storage, adding to
the country's inflation woes.
A doubling in retail prices across major cities is
especially troubling for staples such as onions, an ingredient
that is present in just about every Indian meal.
Unseasonal weather, hoarding and price manipulation have in
the past led to dramatic price rises, and the new administration
of Prime Minister Narendra Modi is anxious to avoid the
political fallout that has hit other governments over the cost
of the food.
Supply shocks like these complicate the government's task of
battling weak growth and inflation. It also underlines the irony
of high food costs in India, which after China is the world's
biggest fruit and vegetable producer.
Finance Minister Arun Jaitley's budget on Thursday will have
to navigate through these issues as he must address inflation
while steering away from populist measures such as food and fuel
subsidies. Annual wholesale prices in May rose to a 5-month high
of 6.01 percent.
Importing onions would be the only effective way to curb
soaring prices, agriculture experts say, but similar steps in
the past have failed to ease supplies.
"The only solution is imports, but that can't be done
overnight," said R.P. Gupta, director at the National
Horticultural Research and Development Foundation (NHRDF).
Prices are unlikely to calm before December. Planting of the
new season crop has been delayed by scorching heat and subdued
rainfall, blunting the affect of emergency measures by the
government aimed at getting supplies to market and keeping a lid
"At the time of storage the bulbs looked good, but as I
started pulling them out last week I realised that the ones at
the bottom of the heap were rotten," said Watpade, 62.
On a recent visit, most farmers from this tiny village 200
km (125 miles) north of Mumbai were busy picking rotten onions
from stocks piled up in fields or in makeshift sheds.
In spite of the experience in Watpade's village, India's
onion production was estimated at a record 19.3 million tonnes
in the year ending June 30, up nearly 15 percent from the
previous year. But that has been too little to calm prices.
NO QUICK FIX
Heavy rains in March also hit the crop grown for seeds,
making quality seeds scarce for planting in the current season.
"Last year the seed price was 400 rupees ($6.70) per kg.
This year the price has jumped to 1,700 rupees per kg. And even
at this price, we are not getting quality seed," says Sampat
Watpade, another local farmer who has cultivated onions for four
decades. The two farmers are not related but, as is often the
case in Maharashtran villages, they share the same family name.
Higher seed prices and now a subdued rainfall during the
monsoon season are likely to reduce the area under summer-sown
crops, says Gupta of the horticultural foundation. Even crops
that are planted will have lower yields, he said.
Rains have been 42 percent lower than normal since the June
1 start of monsoon season, but in Maharashtra the shortfall has
been 72 percent. The lack of water has sharply reduced the
amount of seedlings grown in nurseries for transplanting.
The planting delay will cause severe onion shortages from
August to November, a festival period in the South Asian country
when demand will rise, said Changdev Holkar, a director at the
National Agricultural Cooperative Marketing Federation (NAFED).
The government has curbed exports, urged state governments
to crack down on hoarding and let farmers sell onions directly
to consumers. Such moves may curb speculation, but will not
increase supplies, said Holkar.
"Since the crop has been lost and planting has been delayed,
supplies will remain tight until December."
Indians eat 15 million tonnes of onions a year. The country
exported 1.36 million tonnes of onions in the year through March
Last year, India imported a few cargoes of onions from Iran,
Afghanistan and China. But large-scale imports are not possible
as few producers have big enough surpluses to meet India's
"India is considered to be an exporter. If it starts
large-scale imports, then prices will gallop in the world market
and imports would become uncompetitive," said Holkar of NAFED.
(Reporting by Rajendra Jadhav; Editing by Douglas Busvine and