India says talking to Pakistan over onion imports

Saturday, 8 January 2011 00:01 - - {{hitsCtrl.values.hits}}

(Reuters) - India is trying to persuade Pakistan to resume export of onions, the Indian foreign minister said on Friday, a shortage of which has come to symbolise high food prices in Asia’s third-largest economy.

talks and before not too long we are hopeful we will find a solution to this easing pressure within our country for onions.” S. M. Krishna told a press conference in New Delhi.

The Pakistani ban on onion exports came after India stopped exports of cotton, hitting Pakistan. India’s food inflation rose for the fifth straight week to the highest in more than a year this week, reinforcing fears it has split over to broader prices and cementing expectations of a January interest rate hike.

But the spurt in prices of many basic foodstuffs has also raised questions over the government’s ability to control price rises through monetary policy, with poor infrastructure, hoarding and supply bottlenecks contributing to stubbornly-high food inflation.