Onion prices start cooling

Prices of onion have begun to decline giving some relief to the consumers, traders said.

Retailers said onion was sold at Tk 38-42 per kg (local) and Tk 36-38 per kg (imported) in the city's key kitchen markets on Wednesday, recording a per kg reduction of Tk 4-7.

The prices were Tk 35.5-37 (local) and Tk34.5-36 per kg at wholesale markets in Shyambazar, Rayerbazar and elsewhere in the city on the day.

The prices of the produce marked a significant rise in the first week of this month following the news of Indian export price hike of the spice item.

Experts, however, blamed unholy alliance between importers and big traders for the unusual price hike of the produce.

They said there is no rationale behind such an abnormal rise of local onion prices before September-October, as production was at the optimal level this year.

"Big traders and hoarders are releasing local onions in a huge quantity from their go-downs following some pressure from the government, which helped reduce the price," Md Rabiul Islam (Dhali), a wholesaler-cum-retailer at Nowabganjbazar, in the city said.

"But the scenario could be changed any time showing excuse of higher prices in India," he said.

According to the Indian media reports, the country 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.

The reports said the Indian government is restricting onion export to keep its prices cheaper there.

However, an official at the Department of Agricultural Marketing (DAM) said Bangladesh produced nearly 1.6 million tonnes of onion in 2014.

"Harvesting season was from February to April, so there is no reason for scarcity of onion in the market before September-October period," he said.

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.

He said the hike in onion price by India may cause surge in imported onion price.

"But local onion prices also witnessed unusual increase following the hike in imported ones," he said.

Commerce ministry additional secretary ATM Murtaza Reza Chowdhury said that the ministry was monitoring the market scenario to thwart any unprecedented rise in onion price.

He also said that local onion can be preserved for a long time, which gives traders a scope to store the item and sell it later at suitable time.

Farm economist ASM Golam Hafiz Kennedy observed:  "Import is dominating the onion trade. Nexus of importers and their allied traders is disrupting the market equilibrium."

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.

According to the Trading Corporation of Bangladesh and DAM, onion prices reached an all-time high to Tk 140 (local) and Tk 125 (imported) per kg in December last year.