Onion prices fall in wholesale after import announcement

Wholesale onion prices fell yesterday, soon after the commerce adviser announced the government's plan to approve imports to tackle the recent surge in the bulb's prices across the domestic market.

On Tuesday, the kitchen staple was at Tk 75 a kilogramme at the wholesale level. By yesterday, that had dropped to Tk 65-66.

Retail prices, however, remain unchanged at Tk 75 to Tk 85 a kilogramme.

Wholesalers say many farmers and district-level traders, who stocked onions after the April harvest, slowed their release to the market. This, they claim, pushed prices up in recent weeks.

"Onions have not been available in adequate quantities to meet demand for more than three weeks," said Mohammad Abdul Mazed, general secretary of the Shyambazar Onion Wholesalers Association, one of Dhaka's largest wholesale markets.

In Faridpur, a key onion-producing district, prices fell by Tk 200-300 per maund (40 kg) following the import announcement. On Tuesday, onions sold for Tk 2,800-3,000 per maund, dropping to Tk 2,500-2,800 yesterday.

Shahadat Hossain, senior market officer at the Department of Agricultural Marketing in Faridpur, said farmers and large traders were not supplying enough onions to meet demand, in an attempt to drive prices higher.

Over the past three weeks, prices have risen steadily as traders accused farmers and district-level suppliers of holding back stocks to secure better returns.

At kitchen markets in the capital, locally grown onions are selling for Tk 85-90 a kilogramme, up from Tk 60-65 just a week ago, according to traders.

Trading Corporation of Bangladesh (TCB) data shows retail prices in Dhaka stood at Tk 75-85 on Tuesday, up by more than 33 percent compared to a month earlier. A year ago, onions were at Tk 110-120.

In April this year, Agriculture Secretary Emdad Ullah Mian told The Daily Star that a fair retail price for farmers should be around Tk 60 a kilogramme.

According to the agriculture ministry, production costs for farmers last season ranged from Tk 35 to Tk 48 a kilogramme. Seeds are sown in December, and onions start reaching markets around March or April.

Many consumers say a sudden rise of Tk 20-25 per kilogramme is unreasonable, especially since harvesting was completed in April.

The Department of Agricultural Extension estimates last season's harvest at over 39 lakh tonnes, which should meet domestic needs. However, it projects imports of another 6-7 lakh tonnes will be necessary to cover post-harvest losses.

On Tuesday, Commerce Adviser Sk Bashir Uddin said imports would be allowed to bring down prices in the local market.

"We will import onions from wherever we can get them at a lower price. We will import only as much as is necessary to bring prices down. There is no specific country fixed for this," he said.