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Seasonal hoarders are exploiting the shortage of onions and potatoes by artificially inflating prices through reduced supply, as farmers are selling them to competitors at higher prices before the season, which has reduced production by at least 20 per cent this year.
According to market data, since the end of the potato and onion season in March, prices have doubled within a month and a half.
Business insiders said that the potato and onion businesses have become increasingly profitable in recent years, with high prices between the two seasons sometimes yielding profits of over 50 per cent.
This has led many seasonal investors to stockpile onions and potatoes, reducing the overall supply available in the market compared to previous years.
The hoarders release these stockpiled goods according to market demand and price conditions, leading to price increases even with slight rises in market demand, similar to what happened in the rice and paddy market after 2017.
However, farmers and owners of cold stores say there is another reason for the increase in the prices of these two products. They mention that last year's deficit has to be met by this year's production of potatoes and onions.
Last year, due to shortages of both onions and potatoes, prices soared at the end of the season. Taking advantage of this, many farmers, seeking more profit, sold onions and potatoes from the field before they matured, reducing this year's production.
As a result, farmers have fewer onions and potatoes to store this year, allowing those who stockpiled to benefit. The hoarders are releasing those supplies to the market slowly, causing prices to soar.
Various retailers fear that if this situation continues, there is no guarantee of where the prices of these two products will be in the coming monsoon season.
According to market data, farmers sold onions at Tk 41-42 per kg in various wholesale markets of Faridpur and Pabna last March.
Within a month and a half, that price rose to Tk 54-56 per kg last Saturday. Onions are being sold at Tk 70-80 per kg in the retail markets in Dhaka.
According to Trading Corporation of Bangladesh (TCB) data, onions were sold at Tk 60-70 per kg at the retail level in mid-May last year.
TCB data also shows that this year's potatoes were sold at retail for Tk 35-40 per kg in March, compared to Tk 25-30 per kg last year.
Now, potatoes are being sold at Tk 50-60 per kg in the retail markets of the capital.
Imran Hossain, an onion cultivator from Boalmari, Faridpur, said, “We sold 13 maunds of onions from 8 decimals of land at a good price before they matured and before the full season started. If the onions had matured, it would have been 26-30 maunds. Many farmers, including those who cultivated onions on 10 bighas, sold immature onions from 7 bighas. This means at least 20 per cent of onions were sold before the season began."
“Moreover, many people could not store onions due to the high prices during the season. Many did not want to risk storing onions at higher prices. Those who stockpiled are now selling onions according to their needs and market prices,” he added.
Bangladesh Cold Storage Association President Mostofa Azad Chowdhury said, "Last year, the price of potatoes stored in cold storage was Tk 8-12 per kg. This year, the price of those stored potatoes is Tk 25-30 per kg. By the time they reach the kitchen market, they become more expensive."
"Due to climate change, natural disasters, and diseases, potato production has decreased by at least 20 per cent this year. Additionally, due to the crisis and market volatility, farmers have harvested at least 30 per cent of immature potatoes and sold them after getting good prices," he added.
Md Khalil, a wholesaler of potatoes and onions at Karwan Bazar, said, "There is no hope that onion and potato prices will reduce because there was a time when only farmers used to store onions. Now, many traders have bought and stockpiled onions to get good prices. They are controlling the market, just like the rice market."
In 2017, paddy was destroyed due to sudden floods in Sunamganj, Sylhet. That year, rice prices doubled compared to the previous year.
In the wholesale market, rice that was Tk 26-27 per kg in 2016 was sold at Tk 46-47 per kg in 2017.
However, rice prices have not decreased but continued to rise. After getting good prices at the end of the season, many seasonal traders started stockpiling paddy and rice, further driving up prices.
