The onion market remained volatile on Tuesday, with prices increasing in all wholesale markets, including bordering areas.
Retail prices of the tube appeared to be steady at Tk 80-Tk 100 per kg, which could potentially rise further, according to traders.
The local market of the key cooking ingredient began experiencing volatility on August 20, which traders attributed to India, the largest exporter, imposing a 40-per-cent export duty.
The neighbouring country said it imposed the duty on August 19 to stabilise prices in its domestic market.
Following the announcement, onion prices increased by Tk 15-20 per kg in Bangladesh. Imported onions soared to Tk 80-85, while local onions were priced at Tk 90-100 per kg in the retail market.
Farid Hossain, manager of Bismillah Store in West Dhanmondi, said on Tuesday that the wholesale price of onions had been increasing every hour for the last two days.
He claimed that the price of Indian onions started the day at Tk 70 per kg at Rayerbazar-Beribadh wholesale market but escalated to Tk 73-75 per kg just in the evening.
He mentioned that the wholesale rate of local onions rose to Tk 85-86 per kg on the day. This was compared to Tk 78-82 per kg on Monday and Tk 75-76 per kg on Sunday.
Farid suggested that retail prices might further increase due to the ongoing volatility.
Ajgar Ali, an onion trader in Dhaka, said he had halted onion imports from Benapole due to such volatility.
"My stocks emptied today (Tuesday), as retailers gathered in large numbers and purchased in bulk due to the rising price trend," he explained.
Abdur Rashid Hawladar, an onion trader based in Dhaka's Shyambazar wholesale market, said importers had stopped opening LCs (letters of credit) due to a Tk 12-15 per kg increase in costs caused by India's 40 per cent duty imposition.
He commented that importers would consider bringing in onions only if the government assures them that they can sell the items at import prices without any issues.
Agriculture Minister Muhammad Abdur Razzaque said the market would stabilise within a few days, considering the availability of a substantial local stock.
He also mentioned that traders are being encouraged to import the item from countries like Turkey, Egypt, China and others, where it is available at a lower cost.
Dr Razzaque further said that the ministry granted permits to traders for 1.3 million tonnes of onions, but they have only managed to import 0.3 million tonnes over the past two and a half months.
Farm Economist Prof Golam Hafeez Kennedy noted that while the country's onion production was around 2.5 million tonnes this year, the demand stands at 3.0 million tonnes.
He highlighted that a minimum of 20 per cent of locally produced onions goes to waste. Consequently, there is a shortage of at least 1.0 million tonnes of of the kitchen staple this year.
He explained that importing onions is still cost-effective, with prices ranging from $300 to $320 per tonne in India and other exporting countries.
Prof Kennedy said the government should encourage traders to source onions from various countries to ensure a consistent supply.
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