Both retail and wholesale prices of the cooking ingredient took the jump as India banned onion export
Onion prices have started skyrocketing countrywide both in wholesale and retail since Monday night when neighbouring India imposed an export ban on the cooking essential.
In retail, the locally grown onion price surged to Tk120 per kg while the imported one sold at Tk100 in Dhaka on Tuesday. The unusual hike prompted a rush buying, intensifying the price crisis further.
"People scrambled to stock onions on Monday night just after the announcement of the export ban, leading to a price hike every hour in wholesale," said Karwan Bazar onion trader Mohammad Ashraful.
In Dhaka's Karwan Bazar wholesale market, local onion price shot up to Tk85-90 on Tuesday from Tk50-55 per kg in the afternoon on Monday. Meantime, imported onions surged in prices to Tk65-70 from Tk40 per kg.
Retailers in Dhaka were found selling the key kitchen staple at prices willy-nilly.
Onion prices have kept spiralling by the hour in Chattogram's Khatunganj wholesale market also since Monday night.
At Khatunganj – the country's largest commodity wholesale market – the bulb was at Tk35 per kilogram on Monday morning but went up to Tk50 at midnight following India's announcement of the export ban. The prices kept soaring from Tuesday morning, as the market opened, and climbed to Tk70 per kg in the afternoon.
The highly volatile market upset retailers who came to purchase onions for retail sales. They were worried whether they would be able to sell the item to customers after buying them at the hiked prices. For their part, the wholesalers pointed to the supply crunch, explaining away rising demand as the reason for the price hikes.
"I went to a few wholesalers on Tuesday morning. All of them said they will not sell onions below Tk70 per kg. But I had bought them at Tk38 per kg even on Monday morning," said Abu Sayed, an onion retailer in the Chattogram.
Sayed claimed the stores have enough onions. He was worried about his retail sales if he had to buy onions at Tk70 per kg.
On Tuesday morning, retailers were found queuing up for onions at Khatunganj market. Meanwhile, many wholesalers stopped selling the cooking staple while others were selling it in small amounts so that they still have stocks when prices reach the peak.
According to the market monitoring updates of the state-owned Trading Corporation of Bangladesh (TCB), in two weeks till date prices of locally grown onions increased by 140% from those a month earlier while those of imported ones soared by 182%.
Shafiqul Islam came to buy onions at Karwan Bazar Tuesday. He said a hike ranging from Tk2-4 per kilogram does not bother one too much.
"But we become completely helpless if prices are doubled overnight. It seems we did not take any lesson from last year's onion price crisis," he added.
Following India's onion export ban last year, the cooking essential surged in price to a record high of Tk270 per kg in the local market.
Consumers Association of Bangladesh (CAB) President Ghulam Rahman also believes the government did not learn any lessons from last year's crisis.
The CAB president said, "Traders monitored the Indian market, but the government did not. This situation would not have occurred again if there had been preparations in advance."
Khatunganj wholesaler Saber Ahmed also echoed the CAB president on market Indian monitoring by importers.
He said, "They [importers] hiked the prices as soon as India slapped the export ban."
On Tuesday, Khatunganj also had fewer onion-laden trucks compared to usual times. Many shops of Dhaka's Shyambazar wholesale onion market were closed too. There were allegations that many wholesalers were selling onions through communications via mobile phone to avert a crackdown by the authorities.
While contacted, Manzur Mohammad Shahriar, deputy director of National Consumer Rights Protection, said that the authorities were closely monitoring the situation across the country to keep prices stable.
"We are taking immediate action as soon as any irregularity is found. Hopefully the prices will come down quickly," he noted.
Retail sales drop, customers blame syndication
Onion prices also climbed at district level markets across the country. Prices of the bulb doubled just in three days in Pabna – one of the major onion-producing districts of Bangladesh.
Pabna onion trader Mohammad Johnny said the price hikes had put traders in trouble. "We are facing numerous questions from customers. Retail sales have also dropped to half of what they are in normal times," he added.
In Sylhet, customers alleged that traders had raised the prices of the already imported onions through market syndication – a pattern similar to that of last year.
Sylhet Deputy Commissioner M Kazi Emdadul Islam said mobile courts would be at work to tackle any fake crisis or market syndication.
The Business Standard Brahmanbaria, Satkhira and Netrokona district correspondents also reported that people in the districts were buying more onions than they required.
Retailers rush to Khatunganj
Mohammad Idris, general secretary of Chattogram's Hamid Ullah Market Traders Association, said there were almost no buyers at Khatunganj onion market until last Sunday.
"Now the presence of retailers in Khatunganj is five times higher than the usual following the export ban," added Idris.
The retailers who came to the market in droves were found bargaining over prices at almost every store.
They were agitated as they could not collect onions as per their demands, and told this correspondent that the wholesalers had raised the prices of the already imported item through market syndication.
Idris believes prices have gone up with demand shooting up almost suddenly, while there is a crunch in onion supply. But the hiked prices would not last long as onion importers have already moved to alternative sources.
Traders demand stopping onion import from India
Chattogram traders began importing onions by air and sea to ease the market crisis as India banned onion export in September last year. Later India's export resumption hurt the traders who had already imported the cooking staple from other countries.
They want the government this time to issue instructions on Indian onion import suspension at least for the next four months so that such a situation does not recur.
Traders association leader Mohammad Idris said onions can be imported from China, Myanmar, Turkey, Egypt and Pakistan at $400-500 per tonne and will take about a month.
"If onion imports from India resume in the meantime, importers will incur losses again. Therefore, if we can ensure that no Indian onions enter the country in the next four months, it will be possible to keep the market stable with imports from alternative sources."
Ctg port receives more applications for onion import
Applications for onion import by sea are on the rise since neighboring India suspended the export of the item. From Tuesday morning, importers started filing applications with the plant quarantine station of Chattogram Port for bringing in the cooking essential from abroad.
Asaduzzaman Bulbul, deputy director of the plant quarantine station, told The Business Standard that the station allowed 54 people to import 19,843 tonnes of onions by sea from China, Myanmar, Egypt, Turkey and Pakistan during the first fifteen days of this month. Of them, 21 importers were allowed to import 10,742 tonnes of onions alone on Tuesday.
He said the port released 1,082 tonnes of onions in June, July and August.
In another development on Tuesday, the Chittagong Chamber of Commerce & Industry (CCCI) urged the public not to go for panic buying and requested traders to import onions from available countries immediately.
In a media release, CCCI President Mahbubul Alam also requested the government to expand onion sales through the state-owned TCB.
The Business Standard correspondents in Pabna, Sylhet, Brahmanbaria, Satkhira and Netrokona also contributed to the report