Completely lift import duty on onion: BTTC

In the face of rising prices of onions, the Bangladesh Trade and Tariff Commission (BTTC) has recommended that the government allow zero-duty entry of the kitchen staple to cut import costs and stabilise domestic prices.

Prices of the bulb surged to as high as Tk 150 per kilogramme earlier this week amid reduced supply of locally grown onions as the new cultivation season is about to begin.

The BTTC said the period between October 15 and January 15 is typically a lean season for locally grown onions. Early varieties usually start arriving in the market during this time.

"However, heavy rainfall this year has adversely affected the cultivation of the early varieties. This could be considered as a reason for reduced supply of domestic harvests and the price spikes," said the BTTC in a report submitted to the commerce ministry and the National Board of Revenue (NBR).

Locally produced onion prices increased by 14 percent to Tk 130-Tk 150 per kilogramme in Dhaka over the past week, according to retail data compiled by the Trading Corporation of Bangladesh (TCB).

Imported onions also saw a price rise of nearly 8 percent, reaching Tk 85-Tk 120 per kilogramme, according to TCB.

The BTTC said India, a major supplier of the bulb to Bangladesh, recently imposed a 20 percent export duty to curb exports due to domestic shortages. This has further increased import costs and influenced local onion prices.

The BTTC said the NBR lifted the regulatory duty on onion imports on September 5, maintaining only a 5 percent import tariff until November 30.

"Now it would be prudent to completely remove the duty for a specific period to reduce import cost of onions and increase supply to the domestic market," it said.

"It appears that it would be possible to control the price spike if the imports are encouraged," said BTTC.

Bangladesh produces around 2.6 million tonnes of onions annually, which can meet up to 80 percent of domestic demand.