The prices of onion have shot up despite adequate supply, according to a Bangladesh Trade and Tariff Commission (BTTC) report -- laying bare the extent of market manipulation by a section of dishonest traders.

For instance, in the first five months of the fiscal year, onion imports were up 77.8 percent year-on-year to about 5.3 lakh tonnes, the report showed.

Local onion production in the last fiscal year that wrapped up on June 30 was 25.5 lakh tonnes.

"Considering local production and imports, there is likely to be oversupply in the market," BTTC said in the report released on December 10.

As of November 30, Bangladesh market received 30.8 lakh tonnes of onions from local and foreign sources this year, the report said.

The annual demand for onion in Bangladesh is 27-28 lakh tonne, 65-70 percent of which is met through local production.

"There is no reason for the unusual increase in onion prices in Bangladesh,"‍ said Selim Raihan, a professor of economics at Dhaka University.

Onion prices in Bangladesh almost doubled overnight after India announced an onion export ban on Friday until March 31 next year. India is a major sourcing destination for onion.

At best, 30-35 percent of the annual demand for onion is met through imports, according to the BTTC report.

Although India is a major source of onions, the lightning speed at which the prices shot up following India's announcement of the export embargo is unacceptable, said Mohammad Abdur Razzaque, chairman of the Research and Policy Integration for Development.

"I have never heard of any commodity's price going up so much due to the announcement of an export ban. This means the market is still controlled by syndicates," he added.

The same situation was seen in 2019 but no robust punitive action was taken against the unscrupulous traders then, Raihan said. "Why do we still don't know who is behind these syndicates?"

Meanwhile, the commerce ministry has called for checking the purchase vouchers of traders to deduce whether they are profiting abnormally. The prices of onion on December 7 can be used as the reference price.

The government has called for heightened monitoring of the kitchen markets to cool down the prices of onions.

To further rein in the prices of onions, BTTC has recommended withdrawing the import duty on onions until March next year and relaxing the interest rates and letters of credit margins for importers.

It also called for directly importing onion from the international market to prop up supply in the local market.

Egypt, China, Pakistan, Afghanistan, the Netherlands and Malaysia can be considered for imports, the report added.

Raihan, who is also the executive director of the South Asian Network on Economic Modelling, called for bringing down the dependency on India for onions for good.

The BTTC also called for revisiting the reported local production data of onion.

The upward trend in prices of the key cooking ingredient despite the substantially higher imports can only be explained by markedly lower local production this year.

"That's why the accuracy of the reported local production data needs to be re-examined," the report said.