The volatility in the onion market is likely to persist until a huge quantity of the kitchen staple imported from Turkey and Egypt reaches Bangladesh in about a week.
Commerce Secretary Zafar Uddin has urged patience from all until then.
At least 60,000 tonnes of onions are being shipped in from these countries to redress the scarcity of the cooking ingredient in local markets after the imports from Myanmar failed to alleviate the crisis sparked by India’s indefinite ban on exports of the commodity in September.
Bangladesh requires 2.4 million tonnes of onions a year, according to government statistics. The country usually imports 1.1 million tonnes of onion from neighbouring India on top of the domestic production to meet the demand.
But the price of onions soared up to Tk 100 per kg from Tk 30 after India introduced the export ban. Under the circumstances, the government opted to import onions from Myanmar while engaging its trading arm Trading Corporation of Bangladesh to sell the product in a bid to ease prices.
Raids on wholesale markets were also conducted and while the moves did trigger a slight drop, prices once again spiralled up to Tk 120 in the last week.
The ‘landing cost’ of a kilogram of onion from Myanmar was Tk 42 a fortnight ago, which increased to Tk 70 on Sunday, Commerce Minister Tipu Munshi told bdnews24.com on Monday. “We are facing a problem as Myanmar has also doubled the export price to push it beyond $800.”
The onion prices will drop once the imports arrive in the country, Prime Minister Sheikh Hasina said at a media briefing on Tuesday.
Meghna Group, City Group and Alam Group are importing 60,000 tonnes of onions, said Commerce Secretary Zafar.
“It will arrive in the country in the second week of November. Hopefully the onion prices will fall then. I urge consumers to remain patient until then.”
But the long maritime distances between Bangladesh and its latest import partners could lead to delays in the arrival of the shipments, according to the business community.
“We need at least 10 more days to open new LCs and import onions from Turkey and Egypt,” a businessman told bdnews24.com.
Bangladesh Bank is prioritising the opening of LCs for onion importers.
The commerce ministry, however, does not have the final data on onion imports from sources other than India in the last two months.
According to the central bank, importers opened LCs for 52,000 tonnes of onions in September and 9,364 tonnes of onions from Oct 13-19.
A large consignment of onions imported by City Group is on its way to the country, said General Manager Bishawjit Saha.
“We’ve opened LCs to import onions from Turkey. We hope it will reach the port by Nov 12,” he said.
The first consignment consists of 2,500 tonnes of onions, said Saha. “The price will not cross Tk 40 per kg once all the consignments arrive,” he said.
“City Group and Meghna Group together are importing 1.2 million tonnes of onions from Turkey and Egypt. And S Alam Group is importing 50,000 tonnes,” said the commerce secretary.
The imports will arrive after Nov 12 at which point, the domestic harvest will also kick in. This will lead to a price drop, according to Zafar. The country needs 6,000 tonnes of onions a day, according to officials in the commerce ministry. The price will drop if 2,000 tonnes of onions are added daily to the available stock.
The ministry, however, could not pinpoint the reason behind the price hike of onions.
“We don’t believe that there’s a scarcity of onion stocks in the market,” said Zafar. Most stakeholders point to the stockpiling of onions for the exorbitant prices. But efforts to stop the practice have proved futile so far.
Prime Minister Sheikh Hasina suggested that the hoarding of onions is only taking place to undermine the government.
“Onions are already there. Onions are being kept in many places, according to media reports. Then why are these not being supplied to the markets?” she said.
“Those hoarding the onions should not forget that it’s a perishable good. They may incur financial losses, not profits, in their bid to undermine the government.”
Different government bodies have raided and punished 2,000 traders for creating false demand to increase the onion prices, according to the commerce secretary.
“At least Tk 20 million was realised in fines but it failed to alleviate the situation. It’s a market trend. We’re frustrated at the moment,” said Zafar.
There have been calls for stringent measures against hoarders from different quarters but it will not help resolve the issue, according to Tipu.
“We are taking strong steps against those hoarding onions. The problem is that ordinary people will suffer if we become too strict. We don’t want to put them in jail but make them pro-active. We want to make them understand the situation,” the minister told journalists a few days ago in Chattogram.
