Due to a sudden increase in the onion prices in India, importers are adopting a go-slow policy, cutting onion imports by 60-65 per cent.
On the other hand, local hoarders have reduced the supply of onion in the hope of more profits as its prices keep increasing.
As a result, the prices of both imported and local onions have increased by Tk 40 per kg in the last one week.
However, importers and agriculture officials said that onion prices are unlikely to rise further. Rather the prices will start decreasing at the end of this month because onion harvest has already been completed. By the end of this month, onions will start arriving in the market. Then the demand for old onions will decrease.
According to the Consumers Association of Bangladesh (CAB) data, local onion was being sold at Tk 140-150 per kg on Thursday in the kitchen markets of the capital, including Shantinagar area. It was Tk 100-110 per kg one week ago. The price of local onion was Tk 90-100 per kg two weeks ago.
Imported onion was being sold at Tk 130-140 per kg on Thursday. It was Tk 90-100 per kg one week ago.
Harun-or-Rashid, president of Hili land port export-import group, told The Business Post that after the increase in Indian onion prices, import cost per kg is Tk 100, which was Tk 30-35 earlier.
Since the increase in onion prices, onion import through the port has decreased a lot. Earlier, on average, 1,500 tonnes of onion were coming every day, now 450-500 tonnes of onions are being imported.
"Traders fear that they may incur losses if the price of onion falls due to new harvest. That's why they have reduced onion import,” he added.
He said it is expected that new onion will be available in the market this month. Then the demand for imported onions will decrease a lot and the price will also decrease. So, the price of onion may not increase.
Md. Khalil, a wholesale trader of Faridpur trade in Karwan Bazar, told The Business Post that there is a shortage in the supply of onions in the wholesale market. Therefore, the prices of this essential increased in last one week.
However, the price has increased rapidly since the day India fixed the export price of onions at $800 per tonne. Because, those who stocked earlier are making extra profit, they can sell at a lower price if they wish.
The annual demand for onion in the country is 25-28 lakh tonnes. According to the agriculture ministry data, the production of onions last year was 36 lakh tonnes. Despite the loss of 25 per cent due to various reasons, there is still enough onion in stock to meet the country's demand. Besides, onions are being imported into the country since last June.
According to the DAE data, onion is mostly produced in Pabna, Faridpur and Rajbari. In the last season, onion was cultivated on 53,320 hectares of land in Pabna while 42,000 hectares of land in Faridpur.
DAE officials said three types of onions are produced in the country. Among them, the cultivation of murikata, an early variety onion, starts from the end of October to the beginning of November. These onions start coming in the market in mid-December.
The second variety starts arriving in the market early February.
Md. Rafiqul Islam, head of Faridpur district Department of Agriculture Extension (deputy director) said, due to heavy rains, there has been delay in the preparation of land. But onion cultivation is nearing completion. It is expected that early verity onions will start arriving in the market from December.
Farmers have increased onion cultivation compared to last year. Last year, onion was cultivated on 42,000 hectares of land in Faridpur. Among them, 5000 hectares of land were cultivated in November and December for early variety onion.
This year the total onion cultivation will increase to more than 50,000 hectares. Besides, the cultivation of early varieties of onions will also increase to 7,000 hectares. Of this, onion cultivation has been completed on 3,000 hectares till Monday last. Planting is expected to be completed in next 5-7 days.
