The prices of onion shot up by Tk 35-Tk 50 per kilogram in the retail market on Monday. Market observers described the hike 'artificial'.
They said big traders including importers of the item are behind such an exorbitant hike in onion prices.
Local and imported onions were being sold at Tk 100-Tk 130 a kg at the retail level in the city on Monday.
India imposed a ban on exports of onion from Sunday to prevent volatility in its own market, according to Indian media reports.
The decision taken by India has heightened further the volatility in onion prices in Bangladesh. The prices of the item went up in recent weeks as India had hiked its export price to $850 a tonne.
Onion was being sold at Tk 70-Tk 80 a kg on Sunday morning which increased to Tk 90-Tk 100 a kg in the evening on the same day and it crossed Tk 100 a kg on Monday, according to market sources.
The prices of onion also witnessed a hike between Tk 25 and Tk 35 per kg in a single day in the wholesale market.
While visiting Rayer Bazar and Shyambazar on Monday, the FE correspondent found that onion was being sold at Tk 85-Tk 110 a kg in the wholesale market.
Local varieties were sold between Tk 92 and Tk 110 per kg and the ones imported from Myanmar between Tk 85 and Tk 92 at Shyambazar.
A small quantity of imported Indian onion was selling in the wholesale market while few trading houses were selling those at Tk 96-Tk 102 a kg at Shyambazar.
Md Ismail Hossain, manager of M/S Pabna Banijyaloy of Shyambazar, said Indian ban on onion export pushed up its prices sharply.
He said traders in Faridpur, Pabna, Magura, Kushtia, Jhenaidah also raised the prices of local onion overnight.
Narayan Chandra Saha, proprietor of Nabin Traders in the same market, said there is no possibility of prices cooling down before the Durga Puja vacation.
A substantial quantity of Indian onion will be imported after the vacation under L/Cs that have already been settled, he said, adding that supply of Myanmar onion was increasing which would also have some cooling effect on the market.
Market observers, however, said all efforts made by the government to take control over the onion market seemed futile.
Even open market sale (OMS) of onion by the Trading Corporation of Bangladesh (TCB) has little impact on the market.
The TCB was selling onion at different points of the city.
It was selling onion at Tk 45 a kg.
But the quantity being sold by TCB at each point is too meagre --- 400kgs --- in a situation market by panic buying.
Visiting some OMS points in the city, the FE correspondent witnessed the stock of onion disappearing within two or three hours after the start of the sale.
Consumers Association of Bangladesh (CAB) secretary Humayun Kabir Bhuiyan said poor market monitoring encouraged traders to raise the prices whimsically.
"There is no logic behind a sharp rise in its price just in a day," he said, adding that big importers and relevant traders fixed the prices at their will.
He said all efforts of the government to take rein in the soaring onion prices turned out to be futile.
The country produced 1.9 million tonnes and imported a total of 1.1 million tonnes of onion this year. "So, there was no logic behind the prices going up by such a big margin. The demand for onion is estimated at 2.4 million tonnes," he added.
In the wake of skyrocketing onion prices in the local market, the commerce ministry has decided to send 10 monitoring teams outside Dhaka to ensure adequate supply and prevent hoarding of the item.
Commerce secretary Dr Md Jafar Uddin briefed the media on a recent price hike of onion at his secretariat office on Monday.
There is no reason to be worried about the recent price hike as the supply and stock of onion is adequate and satisfactory in the country, he said.
Besides, a significant quantity of onion is in the import pipeline, he added.
A total of 10 teams will go outside Dhaka to monitor the supply of the key essential item to the market.
The teams will visit mainly production hubs of onion, the commerce secretary said, adding that they will discuss the issue with the deputy commissioners (DCs) concerned and will also work to prevent hoarding.
Mentioning the Indian export ban on onion, he said it is definitely shocking for the local market.
But he expected the prices of the essential commodity to stabilise in the local market within a day or two as the government has taken all necessary steps this direction.
He said the traders are importing onion from alternative destinations including Myanmar, Turkey and Egypt. Two ships with imported onion from Myanmar have already arrived in the country.
Besides, onion from Turkey and Egypt is being imported. It will take seven to ten days' time to reach the country, he added.
Replying to a question, Mr Jafar Uddin said the government will take long-term plan to resolve the onion crisis in the country in future.
He, however, mentioned, "We will take into account how much onion is imported in next one or two months in the country."
The number of trucks under TCB's OMS will be increased to 35 from 16 and the quantity of onion for selling to members of the public will be raised, he said.
The commerce ministry has already taken steps to speed up the delivery process of imported onion from ports and its uninterrupted transportation to help stabilise prices.
Our correspondent from Chattogram adds: The price of onion increased in the retail market after fixing the rate in the wholesale market on Monday. The price of onion in Khatunganj, Asadganj and Chaktai was fixed at Tk 100 per kg.
