Although the commerce minister claimed that the price of onion would come down in the markets soon, it continues to rise belying all expectations. It now sells at Tk 57-60 per kilogramme (kg) in the retail markets. This is the highest price of onion over the last few years.
Some traders, according to reports, have already imported onion which is now available in the markets. But the prices are not coming down. There is a shortage of 0.4 million tonnes of onion against the total annual demand. Traders have attributed surge in import price and dilapidated roads to the hike in the prices of onion. Heavy downpour has also caused an acute supply shortage.
Primary data of the Department of Agriculture Extension (DAE) show that onion production was 1.9 million tonnes in the last financial year (FY'17) against a demand for 2.2 million tonnes. The commerce ministry's data showed that import of onion was above 0.75 million tonnes during the period.
Efforts are, however, being made to import onion from India. But due to recent floods in India, the production of onion has declined and its prices have shot up. And due to this reason, prices of onion suddenly soared in the local markets. However, many importers say prices of Indian onion might surge further as the Indian government was thinking to fix inflated export price for the item amid a hike in prices in their domestic market.
In the circumstances, local businesses have taken initiatives to import onion from different countries, including Egypt. Fresh onion consignment is expected to arrive at Chittagong port soon. This might help pull down market price. The government has directed the Chittagong Port Authority (CPA) to release onion consignment on a priority basis.
There is no denying that transportation hitches and delayed supplies during the rains are pushing the prices of vegetables up. Market observers say prices of onion soared due to market domination by big traders and importers. Local varieties of onion are being sold at Tk 55-Tk 58 a kg early this week. Imported Indian varieties also showed a substantial hike and sold at Tk 53 a kg this week.
There are only two weeks left for holy Eid-ul Azha. The demand for onions will certainly go up. So will onion prices. It's true that onion production was poor in India this year. As such prices have soared there. But that does not mean that its price would double in a week's time here in Bangladesh!
The fact remains that a section of unscrupulous traders simply wait for an opportunity to make a windfall profit. Over the last few months, much has been said about rice and its sudden price hike. Now the local consumers are going to be stripped of cash for high price of onion.
Recently, the Trading Corporation of Bangladesh (TCB) proposed to the government to import onion in bulk quantity as prices of the item have been escalating in the local markets. In a recent meeting, the business community proposed the Ministry of Commerce to reduce duty on import of some essential commodities including onion to rein in the prices. The recent decline in opening of letters of credit (LCs) for importing onion from abroad has compounded the problem.
Although production of onion in Bangladesh has increased in recent years, a significant amount of foreign exchange is being drained out every year on account of imports. The Bangladesh Agriculture Development Corporation (BADC) in collaboration with the Department of Agriculture Extension (DAE) needs to take a project to make the country self-sufficient in onion production.
For example, the corporation can import seeds of onion from Europe. Onions there weigh up to 300 grams each although their peel and colour are similar to the local onions. The department can provide technical know-how to the farmers to grow these onions. If they do so, Bangladesh can become self-sufficient in onion production within a couple of years.
The TCB is supposed to take measures to ensure that unscrupulous traders don't push prices up on any excuse. The commerce ministry's overall responsibility is to monitor the prices of the kitchen market. If it leaves everything in the hands of the businessmen in the name of free market, then why TCB is there to protect the consumers' interest?
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