The National Board of Revenue (NBR) today lifted all tariffs on onions to cut import costs and stabilise domestic market prices of the bulb, which is now costing as much as Tk 150 per kilogramme in Dhaka.

In an order, the NBR said the tariff withdrawal would come into immediate effect and would be applicable until January 15 next year.

The latest development comes two months after the NBR withdrew a 5 percent regulatory duty on onion imports keeping only a 5 percent import tariff. 

Now, there is no duty on onion import, according to the NBR.

Last week, the Bangladesh Trade and Tariff Commission (BTTC) recommended that the NBR provide zero-duty entry to the kitchen staple to cut import costs, encourage importers to bring more bulbs and curb price hikes.

Supplies of locally grown onion, which is used mainly as a spice here, drop during this time of the year 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.

Stock of the bulbs grown in the previous season are almost depleted during this time and early varieties usually help meet a portion of the demand before the main crop is harvested in March.

The BTTC said heavy rainfall this year adversely affected the cultivation of the early varieties of onions.

In its report submitted to the NBR nearly a week ago, the BTTC said India was a major source of the bulb for Bangladesh.

The neighbouring country recently imposed a 20 percent export duty to curb exports due to its own domestic shortages, leading to a further hike in the import costs, which influenced local onion prices.

Bangladesh harvests roughly 2.6 million tonnes of onions annually and the local production can meet up to 80 percent of domestic requirement.

Onion prices shot up 27 percent in the last one month, according to the Trading Corporation of Bangladesh data.