Onion prices fall, how much will Indian onions cost

Onion prices fell sharply in kitchen markets following the government’s decision to allow import of onion from India.

Prices of onions dropped by up to Tk 20 a kg in the capital’s Shaymbazar and Karwan Bazar, and Chattogram’s Khatunganj on Monday.

Prices fell after the agriculture minister said on Sunday that the Plant Quarantine Wing (PQW) of the Department of Agricultural Extension (DEA) would start providing permission to import onions from Monday.

Traders said price would fall further after onions arrive from India since price of this essential is very low in the neighbouring country.

Trader Nayaran Chandra Saha, owners of Nabin Traders in the spice wholesale market Shaymbazar in Dhaka, said price of onions fell to Tk 65 a kg on Monday from Tk 85 a kg on Sunday.

Onion prices fluctuate quickly in Shaymbazar while it takes a little time in other wholesale markets. Visiting the capital’s Karwan Bazar around 12:00pm on Monday, traders were seen selling onions at Tk 92-80 a kg for a five-kg lot.

Replying to query on difference in onion price, a trader said when market turns volatile price fluctuates. Some traders were selling onions at lower price as onions are coming from India.

Trader Sampad Ali was selling local varieties of onions in Karwan Bazar. He said onion price fell by Tk 6 a kg in the morning and price saw fall as onions are coming from India.

Price of onions varies from Tk 60 to Tk 65 a kg based on variety in Chattogram’s Khatunganj on Monday, which was Tk 80-86 a day earlier.

Speaking to Prothom Alo, Chaktai-Khatunganj Wholesale Traders’ Welfare Association general secretary and owner of FM Trades Md Mohiuddin said price dropped significantly after the announcement on import of onion. There are no buyers as nobody is purchasing this item in the hope of prices falling further.

Inconsistency in production data

Traders said 70 per cent of total demand for onion is met locally, if there is a better production in the country, while the remaining 30 per cent of the demand is met from import. According to the Department of Agricultural Extension, more onions are produced than the demand in the country and onion production stands 3.5 million tonnes.

According to the Bangladesh Bureau of Statistic (BBS), production of onion is much lower. The bureau said a little over 2.5 million tonnes of onions were produced in 2021-22 fiscal.

On the other hand, Bangladesh Trade and Tariff and Commission said there is demand of 2.5 million tonnes of onions in the country and 30 per cent of produced onions were damaged during preserve and transportation.

An import permit issued by the Plant Quarantine Wing (PQW) of the Department of Agricultural Extension (DEA) under the agriculture ministry is required to import onions. The agriculture ministry suspended import of onions on 15 March considering the interest of farmers. However, the commerce ministry imposed no restriction on import of onions.

Prices of onion doubled in a month as the agriculture ministry created non-tariff barriers to importing onions. Retail price of onion was at Tk 90-100 a kg in capital’s kitchen market on Monday, which was Tk 45-50 a kg a month ago.

Possible price of Indian onion

The Tariff Commission said in a report that price of onion was USD 121 a tonne in India on May 30, thus, price of onion stands at Tk 13 a kg. There are 5 per cent import tariff and 5 per cent regulatory duty on onion.

Traders said price of onion imported from India may stand at Tk 20 a kg and retailers will make profit by selling it with additional price.

Nayaran Chandra Saha, from Shaymbazar, said if Indian onions are sold at Tk 40 a kg, importers can also make a good profit.

Prices fall at farmer level

Farmers usually store onions under the roofs of their houses and they sell those month after month to manage family expenses. They also sell onions at the end of the season to purchase agriculture equipment for the next season.

Warehouse owners and farmers said not all farmers sold onions even after prices reached Tk 100 a kg, and if price of onions fell sharply because of Indian onion, then farmer would not be interested to cultivate onion in the next season.

Farmer Toufiq Hossain from, Durgapur of Sujanagar upazila in Pabna, told Prothom Alo price of onion fell to Tk 2,600 a maund (Tk 65 a kg) on Monday from Tk 3,200 a maund (Tk 80 a kg) on Sunday.

What should the policy be ?

Every country controls imports in two ways. One is to impose tariffs and another is to create non-tariff barriers. Import can be banned completely in trade policy.

Trader analysts said tariff rates on imports should be set to give protection to farmers and import costs should be much higher than domestic production cost, because it would not hamper imports while prices would not fall too.

Speaking to Prothom Alo, former member of the Tariff Commission Mostafa Abid Khan said a policy can be adapted to impose a regulatory duty at a higher rate to control the import of onion during season and reduce regulatory duty when price increases.

Because, the government needs not to go to parliament to impose regulatory duty, he said adding, onion is an essential commodity and a policy to stop its import completely is not right.

Prothom Alo’s Staff Correspondent, Chattogram and Correspondent, Pabna contributed to this report.

This report originally appeared in the online version of Prothom Alo and has been rewritten in English by Hasanul Banna.

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