Onion prices jump overnight

Onion prices at wholesale and retail markets in Bangladesh rose yesterday after India set a minimum price of $800 per tonne on exports of the bulb.

On Saturday, India decided to impose the floor price on onion exports in a bid to discourage outbound shipments and thereby ensure stability in its domestic market.

However, the move will pile more pressure on consumers in Bangladesh as their purchasing power has witnessed significant erosion over the past year owing to higher inflation, according to market players.

And as per a notification from India's Directorate General of Foreign Trade, the minimum export price will remain effective until December 31 this year.

As such, the wholesale price of local onions has increased by an average of Tk 10 per kilogramme while that of the imported variety has gone up by Tk 10 to Tk 15.

Mohammad Abdul Mazed, general secretary of the Shyambazar Onion Wholesalers Association, said he is now selling Indian onions for Tk 100 to Tk 110 per kg while the price was Tk 90 to Tk 95 on Saturday.

Similarly, the wholesale price of local onions has hit Tk 105 to Tk 110 per kg compared to Tk 95 to Tk 100 previously, he added.

According to Mazed, with an annual requirement of 25 lakh tonnes, about 25 percent of Bangladesh's demand for onions is met through imports from India.

Data of the state-run Trading Corporation of Bangladesh shows that imported onions sold at Tk 85 to Tk 90 per kg yesterday, up 12.5 percent from a week earlier and 29.63 percent a month ago.

Likewise, local onions are currently retailing at Tk 100 to Tk 108 per kg, an increase of about 8 percent from last week and 26.06 percent month-on-month.

But while visiting kitchen markets in the country, it was found that imported onions are retailing at Tk 100 per kg while the price was Tk 85 on Saturday.

Local onions are being sold at Tk 110 to Tk 120 compared to Tk 90 to Tk 100 previously.

The country produced about 34 lakh tonnes of onion this year but another 6-7 lakh tonnes need to be imported as much of the crop is wasted due to a lack of storage facilities, according to the agriculture ministry.

Traders in Pabna said each maund (37 kilogrammes) of local onions is selling for Tk 4,200 to Tk 4,500 at the wholesale level while the price was Tk 3,400 to Tk 3,600 last week.

"As the onion price is rapidly rising, I only bought a small amount today [Sunday]," said Milon Hossain, an onion trader in Pabna, one of the largest growers of onions in the country.

Mohammad Nannu, a major retailer in Pabna, said he sold each kg of onion for Tk 90 to Tk 100 until Friday but is now selling it for Tk 120 to Tk 130.

In Chattogram, many wholesalers are refusing to sell Indian onions following the overnight price hike as they hope to get even higher prices later on.

The retail price of Indian onions in the port city rose 50 percent to Tk 105-120 on Saturday from Tk 70-Tk 80.

Omar Farook, an onion importer based in Chattogram, said India has increased the onion export price in order to keep its domestic supply stable. Considering that aspect, attempts were made to import onions from other countries.

"However, we failed due to various complications in opening letters of credit. As a result, the normal import of onion has been disrupted."