Prices of onion, one of the main cooking ingredients, increased significantly in the last few days in the capital with the traders attributing the price hike to a rise in import costs.
Market observers, however, found hoarding and syndication the reasons for such hike in onion prices.
Prices of the local varieties of onion reached Tk 55-60 per kilogram (kg) while imported Indian varieties were traded at Tk 45-50 a kg on Tuesday.
State-run Trading Corporation of Bangladesh (TCB) recorded a 20-24 per cent hike in prices of the key spice in the last seven days.
Sohrab Hossain, a grocer at Rayer Bazar in the capital told the FE that the price of onion was almost static during Eid-ul-Azha, the second largest religious festival of Muslims which was celebrated in Bangladesh on August 12.
"But it (onion price) started increasing after beginning of normal trading from Sunday after the Eid vacation," he stated.
"I bought local (variety) onion at Tk 2,080 a maund (40 kgs) from Shyambazar on Monday evening which was Tk 1,720-1,750 earlier," he further stated.
Hossain said prices of imported onion also increased to Tk 1,700-1,720 a maund from Tk 1,280-1,300.
Contacted, Zakir Talukder Nayon, a Shyambazar-based trader, said import was totally stopped for ten days due to Eid-ul-Azha (and other holidays).
Supply of local varieties of onion has also declined amid a low domestic production this year, he mentioned.
He said the costs of import also started increasing from July amid a production fall in many states of neighbouring India.
He said onion import costs were Tk 30-32 a kg a several days before the recently-celebrated Eid and it had been increasing since then.
Assistant director at the state-run Department of Agricultural Marketing (DAM) T M Rashed Khan said such hike in onion prices is illogical as import cost is still below Tk 25-26 a kg despite the surge in prices in India.
He said supply of local onion is also good as the flood hardly affected stored onion in Faridpur, Bogura, Pabna and Jhenidah districts.
He said local onion was traded at Tk 12-18 a kg in March-May period at farm level.
Importers and traders in some big markets of Dhaka have been raising onion prices following hoarding of a significant amount of the spice.
India's The Times of India (TOI) reported that prices of onion last week increased to Rs15 (Tk 18.50) a kg at wholesale market of Lasalgaon in Maharashtra state of the country, the biggest onion market in the world.
India also withdrew 10 per cent export incentives on onion in June this year after the prices of the spice witnessed significant increase in the country.
The report said supplies are also limited and the planting of summer-sown crops has been delayed in some areas due to low rainfall.
India exported 2.2 million tonnes of fresh onions in the 2018-19 fiscal year (FY '19) to different countries, the TOI report mentioned.
Bangladesh imported more than 0.9 million tonnes of onion, mainly from India in the last fiscal year, said the ministry of commerce. Its local production of the spice was 1.9 million tonnes, the ministry said.
The demand for the spice in the country is 2.2 to 2.3 million tonnes annually.
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