Govt allows onion imports to tame price spiral

The government yesterday announced that it would allow onion imports to reduce the suffering of lower-income groups amid ongoing inflationary pressure, according to an official of the agriculture ministry.

The decision comes as prices of the bulb have soared abnormally due to stockpiling among a section of traders and growers, the official said.

Onions are currently retailing for as much as Tk 100 per kilogramme (kg) in Dhaka, up 31 per cent from Tk 75 a week ago, shows data from the state-run Trading Corporation of Bangladesh (TCB).

Considering the recent spike in onion prices, the commerce ministry sent a letter to the agriculture ministry on May 14, urging the government to allow imports of the popular cooking ingredient.

Then at a press conference on May 21, Agriculture Minister Muhammad Abdur Razzaque said that onion prices should in no way exceed Tk 45 per kg.

Onion imports have remained halted since March 15 in a bid to ensure better prices for local producers.

But Commerce Minister Tipu Munshi yesterday said the government would permit onion imports considering the interests of consumers.

"Once the price comes down to about Tk 45 per kg, imports will be slowed again."

Traders say they are not getting onions as per the demand as a section of people are hoarding it to take advantage of the delay in clearing imports of the bulb, thereby making more profit.

Meher Uddin, a retailer in Karwan Bazar, one of the biggest kitchen markets in Dhaka, said the demand for Indian onion is high among restaurants.

However, there is no Indian onion in the market now, so the demand for local onions has increased, he added.

The price of onion was Tk 3,100 to Tk 3,200 per maund (37 kg) seven days ago but now, it is being sold for Tk 3,400 to Tk 3,600, said Mohammad Kalam Sheikh, a wholesale trader at Karwan Bazar.

In anticipation of onion imports, most leading wholesalers did not secure sufficient stock of the local variety. So, the sudden increase in demand has led to a dearth in supply.

"As demand has increased, the supply of onion came down in local wholesale markets. So, prices suddenly jumped," said Robiul Islam, an onion wholesaler of Pushpopara haat in Pabna, the country's biggest onion-producing district.

While Islam bought each maund of onion for Tk 2,600 to Tk 2,700 last Thursday, the prices have jumped by Tk 700 to Tk 800 within the last few days.

Onion farmers claim they have sufficient reserves and are waiting to see the market situation.

"As the onion price is soaring, we are happy to profit," said Md Kamruzzaman, a leading onion grower of Durgapur village in Pabna's Sujanagar upazila.

Kamruzzaman then informed that farmers like him did not get their expected profit for the last couple of years as they experienced huge losses in production as well as inadequate market prices.

He went on to say that most farmers have kept about half their harvests in storage this year and so, the current situation is favourable for them.

Jamal Uddin, deputy director of the Department of Agricultural Extension in Pabna, blamed supply manipulation by business syndicates for the abrupt price hike.

The onion market is unstable due to the creation of an artificial crisis in the market despite having sufficient stocks, he said.

Data from the commerce ministry shows that the annual demand for onion in Bangladesh is above 25 lakh tonnes at present.

This year, the agriculture ministry claimed that production is about 34 lakh tonnes.

An official of the ministry, seeking anonymity, said although there is sufficient local production, almost 25 per cent of the total yield is wasted each year due to the lack of storage facilities.