Onion prices soar to Tk110-120 again

Onion prices have increased to Tk110-120 again in the retail market due to lower supply of its local varieties and a shortage of imported onions.

The prices in the retail markets of Dhaka and Chattogram were Tk95-100 just a few days ago. But wholesale prices increased to Tk100-105 at Karwan Bazar in Dhaka on Thursday.

According to data from the Trading Corporation of Bangladesh, the current price of local onions is 171.43% higher than in the same period last year.

Traders say farmers began harvesting onions before they were fully ripe in the hope of getting higher prices amid a supply shortage in the market after India stopped exporting the item on 8 December last year. As a result, the supply of Murikata variety of onions has decreased at present. Although the Meherpur variety of onions is now starting to hit the market, the supply is still low.

Jasim Uddin, owner of Soumik Traders, a commission agent of Khatunganj wholesale market in Chattogram, told The Business Standard that until a week ago, 15-20 trucks loaded with Murikata onions used to arrive there from different parts of the country every day. But the number has now come down to four or five, he said.

The onion market became volatile after the Indian authorities imposed a ban on onion exports. At the time, the price of the essential commodity went up to as high as Tk220. Later, when the supply of Murikata onions increased, the prices came down to as low as Tk70-80 in mid-January.

According to the Ministry of Agriculture, an early variety of Murikata onions are cultivated on about 50,000 hectares of land in the country. The production target for the current year is about 8 lakh tonnes. The onion variety plays a major role in meeting demand from December to February.

Import of onions remains low

After India's onion export ban the Tariff Commission recommended importing the item from alternative countries. But traders have been reluctant to go for the suggestion.

According to official data collected from Chattogram Port, 1,454 tonnes of onions have been imported from China and Pakistan through the port over the last two months.

Mohammad Idris, general secretary of Khatunganj Hamidullah Market Business Association, told TBS that at other times, when India stops exporting, traders import onions from alternative countries. "But this time, due to the increase in the exchange rate of the dollar and the requirement to pay a margin of more than 100% to open a letter of credit, the import volume was very low."

According to the Department of Agricultural Extension (DAE), the onion production target for the current year has been set at 36.73 lakh tonnes. Last year, about 34 lakh tonnes of onions were produced, where actual production had been calculated at 25.49 lakh tonnes considering 25% "post-harvest" loss. The annual demand for onions in the country is about 28 lakh tonnes, which meets 70% of demand.

DAE officials said prices of onions will come down when the full harvesting season of the item begins in the country in March.