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Local onion prices are soaring because of a rise in the cost of imports of the commodity from India.
India is increasing the minimum export price (MEP) for onions in a bid to discourage exports, to calm food inflation in its domestic market.
India hiked the MEP for onions by another $75 a tonne for October, India media reported yesterday, in a move yet to affect local markets here, where its prior hikes are already being felt.
Local retailers sold onions at Tk 30-37 a kilo yesterday, up from Tk 20-26 a month ago -- a 45 percent jump.
"A reduction in the volume of imports has affected its price on the local market," said Narayan Shaha, co-owner of Nabin Traders at Shyambazar, one of the main wholesale centres in Dhaka.
Onion prices began to climb sharply in early September, after India raised the MEP for many export destinations. On August 31, India fixed the MEP for Bangladesh at $325 a tonne.
On September 13, the agri-cooperative National Agricultural Cooperative Marketing Federation of India Ltd (NAFED) increased the MEP for onion exports to Bangladesh another $75 to $400 a tonne.
Shaha said local importers imported onions at $250-270 a tonne prior to August 31.
India is discouraging exports to curb domestic onions prices, which nearly doubled in the past year. Increasing supplies will help, though the floods and crop losses in Pakistan add to rising demand and prices, according to Indian media.
Onion price rises in Bangladesh occurred despite growers bagging more than 14.2 lakh tonnes of last season, up from 8.5 lakh tonnes the previous season, according to estimates by Department of Agricultural Extension.
After staying at Tk 15-22 a kilogram in April-June, onion prices began to rise slowly in early July. In about three months, it rose nearly 81 percent, Trading Corporation of Bangladesh data shows.
Shaha said even though production was high this year, "it was not adequate".
"If local production was adequate, why did prices go up when imports were suspended?" he asked.
Idris Ahmed, owner of a wholesale store called Dhaka Banijjyalaya at Shyambazar, said a reduction of supply due to a decline in the number of importers led to the rise in onion prices.
"Demand is higher than supply," said Ahmed, adding that prices might not decline until fresh onion harvests hit the markets in December.
Source : thedailystar.net
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