Onion supply by the sea is plenty, and the market demand also seems stable. But, the cooking staple is deemed to have broken the common supply-demand market theory as onion prices are still high in retail.
And such a situation keeps deepening as consignments of the bulb keep piling up at the Chattogram port with importers unwilling to release them promptly.
Onion importers said they were not releasing the item from the port as wholesale prices of the cooking essential dropped below the import rates. They also held retailers responsible for selling the bulb at spiraled prices in order to make quick profits.
The Chattogram Port Authority said 18,000 tonnes of onions were stockpiled at the port until Wednesday, and the sooner the importers take delivery of these onions, the better for the port.
Importers started bringing in red onions from alternative sources when India banned exports of the item last September. The government also went for several measures to aid businessmen in a bid to rein in skyrocketing onion prices.
Onion consignments by sea started arriving in the country in the first week of October. Importers said though they made some profit in the beginning, now they are in trouble with the imported consignments owing to over-import and a sharp fall in wholesale prices.
As onion-laden containers kept piling up at Chattogram port, hampering normal operations there, the port authority has been repeatedly asking importers to take immediate delivery of the consignments.
According to importers, onions are brought into Bangladesh from countries like China, Egypt and Turkey in refrigerated containers (reefer container). If they cannot be sold quickly after the opening of the containers, they will rot. Therefore, the importers release onions from the port only after ensuring sales or storage facilities.
As wholesale prices fell below the import rate, they are not interested in taking deliveries from the port now.
The bulb still dearer in retail
The retail onion market is yet to reflect on the fall in wholesale as the retail price of the bulb is Tk15-20 more per kg than wholesale.
According to wholesale traders in Chattogram's Khatunganj, Chinese onions were at Tk30-34 per kg on Thursday while Turkish onions were atTk50-60, Egyptian onions at Tk35-40, Pakistani onions at Tk30-40 and Iranian onions at Tk30 per kg.
However, the retail prices were almost double compared to the wholesale rates as imported onions were at Tk55-70 per kg at Kazir Dewri kitchen market.
Md Elias, a retailer at the market, said that about 20% of imported onions rot after they are purchased from the wholesale market.
"As we have to adjust the prices on the remaining 80% of onions, retail prices cannot be brought down parallel to wholesale prices," he claimed.
Importers fear huge loss
Chattogram-based onion importer Nurul Alam brought 145 tonnes of onions from China at a rate of Tk42 per kg. But he could sell the bulb at Tk10 per kg in the end as most of the consignment got rotten during the shipping and wholesale prices fell.
The businessman estimated a Tk40 lakh loss in the single import with another 150-tonne import being on its way to Chattogram from Turkey. "I will have to incur another loss if the market continues with the current trend," he added.
Another port city importer, Kamrul Islam, told The Business Standard that his 18-container Burmese onions await release at the port. The import cost him Tk48 per kg while Burmese onions were selling at Tk30-35 per kilogram.
"I really do not know what to do with the import." He sounded upset.
Echoing Kamrul, Khatunganj trader Nur Hossain said most of his imports from Myanmar rotted during shipment and he had to incur a loss of Tk15 per kg. "Wholesale prices will come down further once the onions awaiting release at the port hit the market," he added.
Onion congestion at port
As importers are not taking delivery of onion consignments, the Chittagong Port Authority sent a letter to importers and the C&F Agents Association on November 9, asking them to take immediate delivery.
The letter says huge onion-laden refrigerated containers are piled up in the port yard while more goods are waiting to arrive at the port. Onions and other products need to be unloaded quickly after arriving at the port as the stockpiles in the yard are hampering the port's operations.
The letter mentioned that onion-led congestion is hampering the port's handling productivity.
Zafar Alam, a member of the Chittagong Port Authority (Planning and Admin), said that importers keep onions in refrigerated containers in the port yard due to a lack of cold storage facilities. Importers have to pay demurrage four days after the unloading from ships.
"Demurrage goes up every day if the product is not released on time and this pushes up prices ultimately. Therefore, perishable products should be imported in line with demand," he commented.