New Indian export price hike shakes BD onion market

Prices of onion marked a significant rise just in a day in the city's kitchen markets amid the month of Ramadan following disclosure of news of Indian export price hike of the produce, sources concerned said.
However, they observed that syndication of importers and big traders is responsible for the unusual price hike.
They said there is no logical cause behind such high rise of local onion prices before September-October, as the country produced an optimum volume of onion this year.
Meanwhile, traders attributed the onion price hike to export price hike of the item by the Indian government.
Onion was sold at Tk 44-48 per kg (local) and Tk 40-44 per kg (Indian) in the city's kitchen markets on Thursday morning, marking a 20-25 per cent increase in just a day, according to the retailers.
The prices rose with the publication of a news that the Indian government re-fixed minimum export price of onion to US $500 per tonne on June 30, which was fixed at $300 per tonne on June 17 from the previous price of $150 per tonne.
According to the Indian media reports, their government is restricting onion export to keep its prices cheaper there.
However, an official at the state-run Department of Agricultural Marketing (DAM) said the country has produced nearly 1.6 million tonnes of onion this year.
"Harvesting season is from February to April, so there is no reason for scarcity of onion in the market before September-October period."
He said the country's highest demand for onion is not more than 2.0 million tonnes, and it needs to import 0.4-0.45 million tonnes of onion annually.
"Apart from imported onion, prices of local onion also marked a 60-70 per cent hike in last two weeks without any reason," he said.
The official said imported onion will cost not more than Tk 39 per kg, including transportation cost, considering the new export price of India ($500 per tonne).  
A trader at Shyambazar in the city said increased import cost is responsible for the price hike.
He said the country's import dependency has gradually been increasing, as the demand for onion has almost doubled in a decade.
"And in the month of Ramadan, the demand increased by two and half times compared with the normal demand," he said.
But, most of the traders failed to give reasonable answer as to why the price of local onion is increasing abnormally.
Farm economist ASM Golam Hafiz Kennedy told the FE that the government has totally failed to recognise the depth of the problem.
"Imported onion is dominating the item's trade. Nexus of importers and their allied traders is distorting the market equilibrium."
"Import cost of Indian onion has increased, but what is the cause behind the local onion price hike?"
He also said the government should have a proper import policy for commodities based on local crop calendar.
"Import of onion should be restricted during March-June period, which will give local onion an upper hand in the market and help farmers gain fair prices," he added.   
When contacted, commerce ministry additional secretary ATM Murtaza Reza Chowdhury said local onion can be preserved for a long time, which gives big farmers and traders a scope to store the item and sell it later at their suitable time.
He said price hike of imported onion totally depends on its global prices, and the market prices of local and imported ones are linked.
"But we are monitoring the market scenario to thwart any unprecedented rise in onion price," he added.