Onion prices jump Tk20 on supply crunch

Supply shortage pushed up onion prices by Tk 20 per kilogram at retail markets within a week and traders warn that they could go up further in the coming days.

On Sunday, a kilogram of onion was sold at Tk 60-65 at different kitchen markets in the capital, up from Tk 40-45 last week. At the Shyam Bazar wholesale market, it was sold at Tk 53-55 per kg, which cost Tk 35-36 a week ago.

“The prices increased suddenly due to insufficient supply from India. Onion prices are increasing every day. Last week local onion was sold at Tk 35-36 and Indian onion at Tk 32-35 but this week, the local variety is selling for Tk 53-55 and the Indian variety at Tk 45-48,” Onion Traders Association Secretary Hazi Md Mazed told The Business Post.

Mazed explained that a price hike India also pushes up the cost here. 

Indian media reports say onion supply has fallen by around 70 per cent. The wholesale price at some places shot up to Rs 2,250 per quintal from Rs 1,450. On October 1, The Times Of India reported that the overall prices increased by 15 to 20 per cent in the market.

“We imported 6,00,000 to 8,00,000 metric tonnes of onion every year from India. Our local production can meet the demands for six to seven months. Bangladesh is mainly dependent on importing onion from India,” said Mazed, also the Shayam Bazar Banik Samity vice-president.

Md Aleem, a salesman at New Tajmahal Banijjoloy at Shayam Bazar said the shortage of onion supply in the local market is the main reason behind the price hike. “I think it will rise further in the coming days,” he said.

Local traders said that the price of onion increased due to an off-seasonal supply shortage in the market. They also said that India can again ban exports of all types of onions to Bangladesh. 

Prices of the root vegetable, a staple of subcontinental cuisine, went through the roof in the country 2019 after an impromptu export ban by India. The high prices forced people to pay as much as Tk 260 a kilogram at times. This put tremendous pressure on the government to devise ways to meet the domestic demand with local production.

On September 14, 2020, India banned exports of all types of onions to Bangladesh, citing a shortage in supply in India due to heavy rainfall and floods. After that prohibition, onion prices jumped sharply in Bangladesh. 

Later on December 29, 2020, the Indian Directorate General of Foreign Trade decided to lift ban on onion exports from January 1, 2021.

Bangladesh produced 33.62 lakh tonnes of onion in FY20-21 against a domestic demand of around 24 lakh tonnes, according to the Department of Agricultural Extension (DAE).

DAE data showed that farmers produced 23,30,500 tonnes of onion in FY2018-19. During this period, 10,07,218 tonnes were imported, the highest so far. That year, people consumed 33.38 lakh tonnes, the highest consumption by Bangladeshis in a single year.

The second-highest onion-consuming year was FY2017-18 when the nation consumed 31,93,103 tonnes, of which, 23,30,000 tonnes were locally produced and 8,63,103 tonnes were imported.

But in FY2020-21, farmers produced an all-time high 33,62,000 tonnes.