Onion price continues to rise as the spice hit Tk 120 a kilogram on Monday, marking a hike of Tk 10 per kg just in a day and Tk 20-25 in a week.
Rain-induced supply crunch, lower imports and mismatch in local supply and production are causing the volatility, market insiders say.
The agriculture ministry has claimed 3.4 million tonnes of onion production which is above the national demand.
But, traders in the onion growing hubs and Shyambazar in Dhaka have claimed that local output is below 2.5 million tonnes amid crop damage last February due to adverse weather.
Kamal Ahmed, a grocer in Buddhijibir Dhal area of Rayerbazar, said onion price has showed a gradual hike for one and half months.
The wholesale onion price is increasing by Tk 3-4 a kg every day, he said, adding that that local onion was being sold at Tk 110-112 a kg at Beribadh wholesale market.
Julkar Naim, a spice vendor at Shyambazar, said district level traders in Faridpur, Rajbari and Pabna have been raising onion prices amid a reduction in its supply.
Onion production has dropped notably this year amid the adverse weather, he adds.
"Although the government claims onion production of 3.5 million tonnes, we have estimated that it is not more than 2.5 million tonnes this year."
Onion import was almost stopped since August 2023 when India imposed higher duties as well as fixed minimum export price at $800 a tonne, the vendor stated.
However, the Indian MEP is now $550 a tonne, according to an Indian media report.
Another importer said local traders would now be enthusiastic about bringing onion from India as domestic wholesale price goes up to Tk 110 a kg.
He also said that considering higher duties and MEP of Indian onion, import cost would be minimum Tk 105 a kg now.
According to the Plant Quarantine Wing (PQW), Bangladesh imported 0.597 million tonnes of onion last fiscal year.
The imports were made between July and December mostly, said a PQW official.
He said that in the last seven days traders sought import permits for 28,000 tonnes and imported 5,000 tonnes. Economist M Asaduzzamn said the government should first provide most authentic data on onion production.
He said onion production in India has also declined this year, which means the country would keep its duties and MEP in force.
The private sector should be given all logical facilities to import onion from India and other potential countries to prevent volatility, he adds.
And market monitoring should be stricter to protect consumers from any unfair practice, he suggests.
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