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Onion prices soar despite ample supply

'Importers, traders making windfall profit'

FE report | May 05, 2018 00:00:00

After remaining static for the last one and a half months, prices of onion increased notably in the market last week despite ample local supply and low import cost.

Market experts said the onion prices have increased, as big importers and traders are on the prowl to take hold of the market before the holy month of Ramadan starting from mid-May.

Imported garlic prices also showed a 10 per cent hike, according to kitchen market sources.

However, prices of beef, fish and vegetables remain static, maintaining their previous high.

Local onion sold at Tk 45-56 a kg, while imported Indian variety at Tk 35-45 a kg in the city markets on Friday, marking Tk 10-12 per kg price hike in a week.

Trading Corporation of Bangladesh (TCB) data also showed a 23-40 per cent hike in the prices of the item in a week.

Juel Rana, a grocer at Shankar, West Dhanmondi, told the FE that wholesalers have adequate supply of onions, but its prices are rising gradually for the last few days.

"I bought haali variety (seasonal onion) at Tk 44 a kg from Karwan Bazar wholesale market on Friday morning, which was Tk 34-35 a kg earlier," he said.

Humayun Kabir Bhuiyan, secretary of Consumers Association of Bangladesh (CAB), said the big importers and traders are making windfall profit ahead of Ramadan.

He said imported onion is selling at Tk 32-35 a kg at Shyambazar wholesale market by importers, when its import cost is maximum Tk 10 a kg now, following a drastic price fall in neighbouring India.

According to 'MandiGuru', an Indian commodity web-portal, onion was selling at Rs 5.08 (BDT 6.0) to Rs 7.47 (BDT 9.0) a kg for the last two weeks at Lasalgaon and Pune wholesale markets.

He further said the recent price hike is illogical, as it is the harvesting and primary trading season of onion. Big importers in Dhaka's Shyambazar, Dinajpur, Jessore and Chittagong are controlling the market prices of both local and imported varieties of onion.

"Absence of market monitoring is responsible for such high trend in the onion prices just before the holy month when its demand increases notably," he noted.

Assistant director of Department of Agricultural Marketing (DAM), T M Rashed Khan said newly-harvested 'haali' onion is selling at above Tk 50 a kg at retail level when farmers are trading it at Tk 18-22 a kg in Faridpur and Pabna districts.

However, report of Horticulture Division under Department of Agriculture Extension (DAE) showed that a total of 0.29 million hectares of land have been brought under onion farming this year. It is 8.0 per cent higher than that of last year. DAE is expecting 1.95 million tonnes of onion production this year.

Narayn Chandra Saha, a Shyam Bazar-based importer, said imported onion prices increased by only Tk 1.0-1.5 a kg in last three days, and it is normal market trend.

He said imported onion is selling at Tk 22-24 a kg at the wholesales, but the retailers are charge much higher prices.

Domestic onion supply has been hampered to some extent due to lack of favorable climatic condition for the last two weeks. Subsequently, price of local onion has witnessed a surge in Pabna, Faridpur, Natore, Jhenaidah, Magura, Bogra, Kushtia and other key growing districts, causing further price hike in the city retails.

According to Bangladesh Bureau of Statistics (BBS) and Ministry of Commerce, demand for onion is 2.2 million tonnes in the country, of which it produces 1.87 million tonnes.

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