Prices of onions, the imported variety in particular, have dropped further in the country, as India withdrew the minimum export price (MEP) for overseas sale of the produce on Friday, traders said.
In the last two days, wholesale markets at Shyambazar, Karwan Bazar and Beribadh-Rayerbazar in Dhaka saw the prices of Indian onion decline by Tk 10-Tk 12 a kilogram.
On Sunday, Indian onions were selling at Tk 44-Tk 45 a kg at Shyambazar, depending on their quality, while newly harvested local onions remained static at the price level of Tk 40-Tk 44 a kg.
On the other hand, retailers were selling both varieties of onions, imported and local, at Tk 55-Tk 65 a kg, down by Tk 5.0, in the city markets.
India, the world's biggest exporter of onion, had imposed curbs on overseas sales late last year in an attempt to ease its prices in the domestic market.
In November last, the Indian government set the MEP at US $850 a tonne for overseas sale of onions, but subsequently reduced it to $700 per tonne in January this year, the Economic Times of India reported.
India will allow unrestricted export of onions, the government said in an order on Friday, as prices of the spice fell over a third in a month, it said.
The Hindu of India reported that the wholesale prices of onion fell below Rs 30 per kg (Tk 36) at the Lasalgaon in Maharashtra, Asia's biggest onion market.
According to the data maintained by National Horticultural and Research Foundation (NHRDF), India, wholesale onion prices declined to Rs 28.50 per kg (Tk 34.2) at Lasalgaon on Sunday from the peak -- Rs 57 per kg (Tk 68.4) -- in August last.
In Bangladesh, onion prices hit Tk 110 (imported) and Tk 130 (local) a kg during September-October period on the back of higher import costs, said traders.
Narayan Chandra Saha, a leading importer, told the FE that many traders have released their old stocks in the last two days, creating a supply glut in the markets, which contributed to the fall of prices by Tk 10-Tk 12 a kg.
The opening of L/Cs against onion import also surged significantly on Sunday morning as India withdrew the MEP, he added.
"We can now import onions at Tk 35-Tk 38 a kg, which might lead to a further decline in prices, depending on the Indian market," he said.
Humayun Kabir Bhuiyan, secretary of the Consumers Association of Bangladesh (CAB), however, said prices of onions are still much higher, compared to the prices a year ago.
He said big onion importers in Dhaka's Shyambazar, Dinajpur, Jessore and Chittagong are still dominating the market.
During September-October period last year, the importers sold onions at Tk 90-Tk 110 a kg, although they imported the spice at Tk 38-Tk 52 a kg from India, he said.
The newly harvested onion is now selling at Tk 55-Tk 65 a kg at retail level while farmers are trading them at Tk 30-Tk 35 a kg, he added.
Such as big price gap between the farm and retail levels has deprived the consumers of getting price relief, said the CAB secretary.
He strongly emphasised the need for a strict market monitoring system to check any artificial price hike.
Bangladesh produced 1.78 million tonnes of onions last year against a demand for 2.2 million tonnes, according to the commerce ministry and Bangladesh Bureau of Statistics (BBS).
The country imported 0.9 million tonnes of onions against a deficit of 0.42 million tonnes during the period, the ministry said.
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