Asian Onions

One hundred Indian rupees is worth $1.39 this morning. That’ll buy you one kilogram—just over two pounds—of onions in Mumbai.

In the US, inflation hovers around two percent, and in the EU, the numbers are about the same. In the developed world, inflation is a quiet ogre, but as soon as it stirs, trouble brews.

High values can throw an economy into a tailspin—money becomes worthless, and society reverts to barter.

When you need a log scale to count your money, the giant’s on the rampage.

But Zimbabwe is an extreme example—in Venezuela, the inflation over the past three years was only fifty-three million percent. Other countries have roared into the hundreds and stayed there for decades—Argentina averaged 196% per year since the Second World War.

High inflation over long periods creates a systemic parallel economy where nations live in a nebulous region of black market currency trades. The increase in money supply to meet spending requirements drives up prices, at which point governments print more money, and a stable economic cycle plunges into chaos.

Chaos theory would merit a lifetime of articles, but the key principle is that small changes can cause huge effects—the non-linearity fascinates me, since it can be the cause of incredible disasters.

The effect of hyperinflation is amazing in terms of numbers theory, but in the real world the shifts in state, as the system moves from a stable limit cycle to chaos, can only be qualitatively predicted—by that I mean that you can envisage the types of changes, but you don’t know when, where, or how they’ll happen.

In economic terms, a worthless currency leads to a collapse in imports, since foreign goods can no longer be paid for. In the transportation sector, that means less vehicles—no new ones, no spare parts. Distribution of essential goods stops—food, water, medicine…

People lose their jobs, or are paid a fraction of what they need to survive—think Venezuela right now. And I do mean think. Please read the next paragraph, then just close your eyes for a moment and imagine what it would be like if you were in that position today.

President Maduro (the name means nutcase in Portuguese) increased the minimum wage by 275% in October 2019. Last month, Venezuelans began earning a base of one hundred fifty thousand bolivars, or eight bucks. That buys them nine pounds of meat, or five ounces a day—one hundred forty grams, if you prefer. To make it easy, a gram of meat daily per thousand bolivars per month.

Job losses lead to hunger, hunger leads to strife, both lead to exodus, and ultimately to war for those that remain. War leads to death. Welcome to chaos.

It’s hard to say exactly when the butterfly beat its wings, and just how fast or slow it really was, but the Bolivarian Republic of Venezuela was established only twenty years ago by Hugo Chávez—in a country with the largest oil reserves in the world, a mere three hundred billion barrels, or half the volume of Lake Geneva.

Onions in the market in Mumbai in October 2019 (courtesy of Bloomberg). India is importing from Egypt, and even from the Netherlands.

Which brings me to onions. India, and Southeast Asia in general, use the onion as a universal staple. The gastronomic delights of English food made me fall in love with curry at an early age, and a sure way to learn about a country is to explore its cuisine—yup, eat its food.

To understand a country’s regional dishes is to dive into its diversity—some nations have it, be they large or small—China, India, Italy, Portugal—and some, like the UK, do not.

The Indian onion is a fascinating, and highly divisive, economic indicator. At present, with inflation running at 4.6% year-on-year, vegetable prices are up twenty-six percent.

National politicians are plagued by onions—in the west and north of India, high onion prices are good news, because the staple vegetable is grown mainly in the states of Maharashtra, Gujarat, Karnataka, and Uttar Pradesh. However, in other parts of the huge nation, an increase in onion prices, especially on the present scale, is  extremely unwelcome—hapless Indian politicians are damned if they do and damned if they don’t.

India is a rare beast among huge nations—the largest democracy in the world. In 2019, there were nine hundred million eligible voters, and sixty-seven percent of those turned out to vote. Narendra Modi won, but the economy is hounding him—with the exception of brahmins and pure vegetarians, those voters are onion enthusiasts.

A combination of drought and monsoon rains hit the onion harvest hard, tripling prices, and halving consumption. All Indian onion exports to neighboring countries are currently banned, causing general onion angst in the region, and the government has cracked down on onion smugglers.

I don’t suppose truckloads of smuggled onions will be impossible to detect—I can picture the highly trained Indian frontier K-9 brigade pawing their way through a load, weeping on the job and barking in protest, as their incredibly sensitive noses are violated by the pungent prevaricators.

The Indian government’s export ban caused a seven hundred percent price jump in Dhaka, the capital of Bangladesh. Nepalese consumers considering alternatives apparently view Chinese onions as ‘big and flashy’, which doesn’t sound like a ringing endorsement, so (and after suffering through articles talking ad nauseam about ‘the onion crunch’ etc etc) I can only conclude that it’ll all end in tears.

India is also busy importing onions—the universal base for a curry, whether you’re talking about a South Indian Avial—their website motto is ‘eating plants till we photosynthesize‘ so perhaps a spot of biology revision is in order—or a Mughal Rogan Josh, which is a case of invasive gastronomy from Iran. In passing, another humble contribution to Indian cuisine was the chili, supplied by the bearded invaders of The India Road, having first been brought to Europe by Columbus.

In this wonderful modern world of onion commerce, why not the UK? is there yet another great trade deal in the making?

Hold on to your onions, Boris, there’s hope for you yet.

The India Road, Atmos Fear, Clear Eyes, and Folk Tales For Future Dreamers. QR links for smartphones and tablets.