Lower demand slashes onion prices

Prices of onion declined by Tk20-25 per kg at the capital's kitchen markets in the last couple of days, after a sharp rise of the prices of the main cooking ingredient ahead of Ramadan.

At Karwan Bazar, one of the city's main hub for daily essentials, onion is now being sold at Tk40-45 a kg against Tk60-65 even a couple of days ago.

Retailers said the demand of onion declined significantly among the consumers now as they bought onions in bulk just before the start of Ramadan.

Abul Kalam, a retailer of Karwan Bazar, put the blame on the behaviour of the consumers for the rise and decline of onion prices.

He said, “I have been in commodity business for the last twelve years and never seen falling of onion prices in the midst of Ramadan.”

Onion is a widely used ingredient for preparing different Iftar items; but this year hotels and restaurants are closed due to the coronavirus pandemic which is also a reason for the less demand of onion in Ramadan, he said.  

In addition, consumers also bought onions in bulk before Ramadan, contributing to price hike of the essential cooking ingredient then but less demand and subsequent decline in price now, he pointed out.  

“The tendency of storing various essential commodities among the consumers beyond their needs is responsible for fuelling price in the market. We saw people buying 5kgs, 10kgs and 15kgs of onions before Ramadan as if this item would no more be found in the market. Panic buying also fuels the price,” said retailer Abul Kalam.

However, consumers put the blame on traders. Talking with The Business Post on Monday, Abdul Gaffar, a retired school teacher, expressed his frustration over the frequent fluctuation in prices of essential commodities.

“There are tendencies among the traders to make consumers prisoners at their will as the former creates artificial crisis of the essential commodities before any important occasion or festival to maximise their profit,” he said.

“I had bought onions at a price of TK30 per kg just a week before Ramadan. I bought the same quality of onions at Tk65 a kg with the advent of Ramadan; now, this onion is now being sold at Tk40.”

“What happened in the market now that dropped the onion price by Tk20-Tk25 per kg?” Gaffar questioned.

The government should intervene in the market to keep the prices of essential commodities stable, he opined.

Haji Mazed, president of the Bangladesh Onion Importers Association, said he finds no reason why there is so much fluctuation in prices of onion as the country has a sufficient stock of the cooking ingredient.

“We have a sufficient amount of local varieties of onions along with the imported ones. I hope market will be stable from now on,” he added.

Onion price in the market remain unstable for a long time as India, main sourcing destination of onion import, stopped supplying in September last year, pushing the price as much as Tk 250 per kg in the local market.

Yet the price of the onion was hovering around Tk 100 per kg despite different initiatives of the government until India lifted the ban on onion exports on February 26.

The country has a demand for 24-25 lakh tonnes of onion. It also imports another 10-11 lakh tonnes of onion mainly from India.

The price of the onion started to flat again when local variety of onions flooded the market in March this year, subsequently lowering the price even at Tk 20 per kg in middle of the April.

/sh/at/teb