The economics of India's never ending onion price problem

In today’s Finshots, we try to make sense of why India keeps struggling with rising onion prices.But before we begin, if you love keeping up with the buzz in business and finance, make sure to subscribe and join the Finshots club, loved by over 5 lakh readers.Already a subscriber or reading this on the app?

You’re all set. Go ahead and enjoy the story!The StoryOnion prices have crossed ₹60 a kg in many parts of India. And the government is trying to step in and manage the situation by sending buffer stocks through a “Kanda Express” (Onion Express or a dedicated onion freight train) to places where prices have shot up.It’s hardly surprising though. Because, at this point, most of us are used to it.

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We’ve seen major onion price crises every eight to ten years since 1980, with sharp price spikes, and sometimes even crashes, popping up more frequently in between.But instead of normalising this, have you ever wondered why it keeps happening so often?Okay, maybe you have. And the answer would probably have been the usual suspects: harvests, weather, storage and political interests. But that’s only the surface-level explanation.