Onion prices go up by Tk20 per kg due to supply crunch

The price of onions has been on the rise for a week in the domestic market due to a shortage of supply.

According to traders, the prices have increased by at least Tk20 per kg recently as imports have been suspended for almost two months even though the demand remained stable.

The agriculture ministry imposed a ban on importing Indian onions from 6 May to protect the interest of local farmers. Since then, the government has not issued an import permit (IP) for onion imports.

Traders in Khatunganj, the largest wholesale market in Chattogram, said that the price of the popular cooking staple has been going up by Tk2-4 daily. If the import of onion is not resumed soon, the prices will go up further.

In Khatunganj, large-sized onions were selling at Tk52-55 per kg, and small-sized ones at Tk40-42 per kg on Sunday.

At the beginning of last week, large onions were sold at Tk35-37 and small onions at Tk 25-30 per kg. There is no supply of imported onions in the market except the domestic variety, traders said.

Mohammad Razu, manager of Mrs Grameen Banijyalay in Khatunganj, said, "Importers have not received any import permit (IP) for onion since 5 May. Within two weeks, the supply of imported onions started to run out."

"Besides, many farmers have lost their produced onions due to the recent floods in different districts of Sylhet division, which has also intensified the supply crunch, and pushed the prices up," he added.

Md Idris Mia, general secretary of Hamidullah Market Business Association in Khatunganj, said, "The government's ban on onion imports during the domestic onion season is a very good initiative. Field-level farmers have gotten good prices in the last two months."

If onion import is banned this way every year, our farmers will be more encouraged in production and yield will increase year on year, he said

But now that we are having a supply crisis, the import should be allowed, Idris Mia added.

Harun-ur-Rashid, president of the Hili land port Importers-Exporters Group, said "Onion imports from India through the Hili port have been suspended since Eid-ul-Fitr. Now the prices are starting to rise and may rise further before Eid al-Adha."

According to the Department of Agricultural Extension, the demand for onions in the country in the outgoing 2021-22 financial year was 35.50 lakh tonnes while 36.41 lakh tonnes of onions were produced.

However, 25% of onions usually get wasted from the time of production to the time of consumption which includes post-harvest loss, spoilage and discarded during cooking. As such, the amount of wasted onions in the country is about 9 lakh tonnes. In addition, about 2% of the planted onions are reserved for next year's seeds. Thus, there is a shortage of about 8 lakh tonnes of onions in the country. 

In the last 2020-21 financial year, the demand for onion was 35 lakh tonnes. The amount of onion produced that year was 33.62 lakh tonnes.