It is rather amazing just how many questions can arise out of a simple onion. Following Noam Chomsky's advice that the only honest reporting is done in the business pages, I was browsing the Bloomberg website when I can across an article about how onion traders were viewing current Indian anti-inflation policy. The article opens with a man named Arun Kumar, a produce market middleman, saying he " has seen many Indian governments try and fail to eliminate middlemen at produce markets who are blamed for hoarding and stoking inflation." One of the big drivers for the concern over inflation and food markets is the lack of monsoon season rains this year--India is experiencing a 45 percent drop in rainfall amounts. A full scale drought, according to HSBC Holdings Plc., could reduce Indian economic growth by as much as a half-percent this year.Food prices in India make up about 50 percent of the consumer price index, which rose 8.28 percent in May of this year alone. (By way of comparison, food prices make up about 15 percent of the US CPI).
Notice of this drought in India comes at the same time that some sixty communities in Saskatchewan and Manitoba are dealing with floods from major storms dropping between 75 and 150 mm of rain in 24 hours. Both the drought and the rains (similar to last year's Alberta rains that flooded Calgary and High River), are driven by global warming changing the amount of water held by the air and changes to weather patterns; India sees 45 percent less rain during monsoon season and southern Saskatchewan and Manitoba get a whole summer's worth of rain in 24 hours.
Both these events will negatively impact the production of food in their respective countries. Bloomberg's reports that, in India:
After an emergency meeting two days ago, Jaitley said the government would ask states to crack down on hoarders, aid imports of pulses and cooking oil, and fix a minimum export price for potatoes and onions to discourage overseas sales. Food Minister Ram Vilas Paswan said India will offload about a quarter of its rice stockpiles.
