Unholy alliance still at play

Despite increased onion output locally, importers and allied traders are swallowing all benefits depriving consumers and farmers alike, said market observers.

Domestic yield has registered a 40-per cent rise in the past six years and more than 100 per cent in a decade, according to official figures.

Onion production witnessed a major leap amid rising demand. Even some profit by farmers also helped boost onion farming.

But bumper production and a low deficit have signally failed to stem the tide of price rises.

Importers and their allies in Dhaka are holding a major share of the market overcharging consumers, according to official statements and studies.

Onion prices hit Tk 70-80 (local) and Tk 65-70 (imported) a kg last week, a 40-per cent hike in just seven days and 55 per cent in a month.

The data available with the Trading Corporation of Bangladesh (TCB) showed onion now sells at 65 per cent higher than last year's rate.

Prices rose by Tk 15-16 a kg just a day after India fixed its minimum export price at $850 a tonne on September 13 to boost domestic supplies.

The Bangladesh Bureau of Statistics has showed a substantial rise in onion output in Bangladesh from fiscal year (FY) 2013-14 to FY '19.

Onion production reached 1.9 million tonnes in FY '19 from 1.386 million tonnes in FY '14, posting a 40 per cent hike.

But imports too increased during the period, sometimes hurting the growers, according to the official data.

Onion production reached a record high in FY '15 with 1.70 million and this trend continued for the next couple of years.

Import rose to 1.1 million tonnes in FY '19 against only 0.41 tonnes in FY '14, according to the central bank.

Department of Agricultural Marketing director general Mohammad Yousuf said import was hardly 0.30 million tonnes a decade back to meet 50-52 per cent of demand.

He said the deficit is now maximum 23 per cent taking into account the demand for 2.4 million tonnes.

Onion growers usually get Tk 20-26 a kg against their production costs of Tk 12-18. But they have suffered for the past two years amid untimely imports, he cited.

Mr Yousuf said the import policy regarding onion should be reviewed to protect farmers. Even import should be restricted between February and May.

According to the Bangladesh Institute of Development Studies (BIDS), local output is meeting a major demand, but imported onion is still a decider for market.

A 2018 BIDS study styled 'Onion Market of Bangladesh: Role of Different Players and Assessing Competitiveness' said import comprises 27 per cent of the demand but it decides the market.

The study said the local onion market is strongly linked with the market in India due to that imported onions from India meet notable share of local demand.

Thus, any shock in the Indian market is transmitted quickly to the market in Bangladesh, it added.

The report showed importers at Shyambazar in Dhaka, Karwanbazar and Moulvibazar are the key market players.

However, it prescribed raising onion production locally by using high-yielding varieties, providing subsidies to farmers and appropriating a timely import policy to boosting onion output.

Meanwhile, Consumers Association of Bangladesh secretary Humayun Kabir Bhuiyan accused importers and traders of a rise in the prices of both local and Indian varieties.

"It happened as a syndicate of big importers and their allied traders is dominating the market for both imported and local onion varieties," he said.

Mr Kabir said local production has been bumper this year and the season ended only in April-May. So, there was no possibility of onion shortages before December.

During harvest, he said, local onion sold at only Tk 14-22 a kg in Faridpur, Pabna, Jhenidah, Bogura, Kushtia and other onion hubs.

Framers incurred losses by growing onion this year amid entry of Indian onion in a large volume, Mr Kabir said.

"The local variety is now trading at Tk 70-80 a kg. Is it business?" he said while expressing his grievances.

He said monitoring should have to be strengthened at Shyambazar wholesale and other marketplaces.

"A lack of strong monitoring encourages traders to rig the market all year, especially during the movement or international prices."

Our Chattogram correspondent adds: Onion prices are yet to be stable in the retail market there.

Sources said the price of onion per kg is Tk 58-65 while it is Tk 50-52 at wholesale markets at Khatunganj, Chaktai and Asadganj in the port city.

TCB is yet to start selling onion in the port city. As a result, its prices are galloping at retail level.

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