Both the wholesale and retail prices of onion increased by Tk 10-15 per kilogramme on Sunday, just a day after India imposed 40 per cent duty on its export till December 31.
Citing to improve the domestic availability of the vegetable, the Indian finance ministry on August 19 issued a notification to this effect.
Though Bangladesh is meeting most of its demand through local production, the country, on average, imports nearly 10 lakh tonnes of onion every year, mostly from India.
After issuing the notification by India, the onion prices increased in the local market despite the fact that essential goods come at least two weeks after opening of new letters of credit (LCs).
Visiting the country’s largest wholesale kitchen market Karwan Bazar on Sunday, this correspondent found that the price of imported onion went up by Tk 10-Tk 15 to Tk 65-Tk 70 per kg. It was Tk 55-Tk 60 per kg on Saturday. Apart from Indian onion, the price of local onion also increased by Tk 15-Tk 20 per kg to Tk 80-Tk 85 in the wholesale market.
In the retail market, the domestic onion price went up to Tk 85-Tk 90 per kg from Tk 70-Tk 85 on Saturday.
“Domestic onion price increased because of syndication. Traders at Khatunganj in Chattogram were not selling onions below Tk 60-62 per kg yesterday,” said Md Abdujjaman, an onion wholesaler at Karwan Bazar.
He said as India slapped 40 per cent export duty, the price of onion increased by Tk 10-15 per kg.
Md Zakir Khan, a resident of North Badda, told The Business Post, “As there is no fixed price list in the market, traders are selling onions at their will. Retailers are asking Tk 80 per kg for Indian onion while the stock of domestic onions at my shop ran out.”
Our correspondent from Hili Land Port said that the price of per kg low-quality Indian onion rose by Tk 10-Tk 12 to Tk 45 while per kg high quality onion soared to Tk 52 from Tk 40 on Sunday.
The country is not facing such kind of situation for the first time. In September 2019, India banned onion export for an indefinite period without any pre-announcement, which caused supply shortage in Bangladesh’s market. During this period, the onion price hit a record high of Tk 260 per kg.
After the year, India also took the same decision without pre-announcement, and the onion price also increased steeply.
This time Bangladesh was heavily dependent on Indian onion. To overcome the crisis, the government planned to be self-sufficient in onion and the production of the essential vegetable rose to nearly 34 lakh tonnes from 28 lakh tonnes within two years.
However, onion production slightly declined this year due to unfavorable weather conditions, and despite the situation, India again took the move to impose export duty, which is affecting the country’s onion market.
However, Agriculture Minister Dr Muhammad Abdur Razzaque at a programme held at Khamarbari in the capital on Sunday said, “The price hike of onion will not have much impact on the market.”
In reply to query from journalists he said, "We have allowed import of 13 lakh tonnes of onions so far and 3 lakh tonnes have already arrived in the country."
At the field level, it has been found that the farmers of the country still have a relatively large stock of onions. So, even though India imposes a 40 per cent duty on onion exports, there will not have much impact on onion prices in the country, he added.
“After the announcement of the tariff, the prices will go up a little, but will come down after a few days.”
The minister also said that attempts will be made to import onions from Turkey, Egypt and China.
