Prices of imported onion go up as budget proposes duty
Importers said import costs have risen as customs has started implementing the five percent additional tax proposed in the FY21 budget
The price of imported onion has gone up at the country's largest wholesale market in Khatunganj, Chattogram after a fresh five percent customs duty on onion imports was proposed in the budget for fiscal year 2020-21.
Imported Indian onion which was sold at Tk18-20 per kilogramme last Sunday (June 7) fetched Tk25-26 per kilogramme yesterday (June 14).
Wholesalers said demand for onion increased since Thursday, and as a result, the price had also risen. At the same time, import costs have risen as customs has started implementing the proposed five percent additional tax, said importers.
Mohammad Ayub, manager of Bachamia Sowdagor, an onion wholesaler of Hamidullah market in Khatunganj, said, "From Saturday, the first day of the week, the onion market is witnessing huge demand. On Saturday and Sunday, the price of imported onion rose by Tk6-8 per kilogramme."
"There is an upward trend in onion price due to an imbalance between supply and demand on the wholesale market now," he said.
However, the price of local onion also increased by Tk6-8 per kilogramme at the same time. On June 7, local onion was selling for Tk18 per kilogramme while it was sold at Tk28 yesterday (Sunday) on the wholesale market.
During Ramadan, when onion prices skyrocketed following India's ban on exporting onions in September 2019, Bangladeshi importers imported onions from different countries – including Myanmar, China, Turkey, and Egypt – to meet the local demand.
The price of onion began falling when India lifted the ban in March this year. The Indian onion price has come down to Tk18 per kilogramme.
Hazi Mohammad Idris, secretary of the Khatunganj Hamidullah Market Businessmen Welfare Samity, told The Business Standard, "There is no onion of other countries on the market now, except the Indian variety. After the proposed budget was announced, the price of onion increased. Importers have increased the price and the customs duty has increased."
When contacted, Mobarak Hossain, proprietor of Maria Corporation, an importer who imports through the Hili land port in Dinajpur, told The Business Standard, "Following the proposed budget, the customs office has started realising the duty from us. So, import cost has increased and, price too, on the wholesale market."
Describing the hike in onion price with the proposed budget as unrealistic, the Consumers Association of Bangladesh said the government should increase surveillance so that unscrupulous businessmen cannot increase the price.
"The government has proposed a five percent tax to encourage local farmers to produce onions locally. The government should not allow unscrupulous businessmen to let it down by hiking onion prices unreasonably," said SM Nazer Hossain, vice-president of the association.
