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The commerce ministry is working to stabilise onion prices after they crossed Tk 200 per kg in the local market following India's extension of an export ban on Friday.
The ministry's skyrocketing-price countermeasures include diplomatic outreach to India, tasking deputy commissioners with overseeing onion sales and exploring alternative import sources.
According to official sources, the ministry is also considering expanding subsidised sales of onions through the Trade Corporation of Bangladesh (TCB).
On a positive note, traders said that the early winter local onion variety "Murikata" is starting to arrive in markets, which is expected to slightly ease price pressure. Besides, immature onion leaves are currently being sold in the market.
Prices of the kitchen staple nearly doubled on Saturday following news of India's extended export ban until March 2024. Local onion varieties were priced between Tk220 and Tk250 per kilogram in Dhaka on Saturday and Sunday, representing an increase of over 100 per cent in a single day.
TCB data shows that local onions sold for Tk180-190 per kilogram on Sunday, while imported ones were available for Tk160-170 per kilogram. While the price remained stable compared to Saturday, it did not decrease.
Similar to the latest incident, India's abrupt onion export ban in 2019 also caused significant price increases in the local market, with onions reaching Tk290 per kilogram.
Senior Commerce Secretary Tapan Kanti Ghosh on Sunday blamed profiteering for the sharp price increases, calling them "unacceptable".
According to commerce ministry sources, the officials have requested the Indian government to exclude Bangladesh's import consignments of onion from its export ban, particularly those with letters of credit opened before December 9.
The ministry has also instructed deputy commissioners (DCs) to ensure fair prices throughout the country.
Besides, the ministry is considering importing onions from alternative countries such as Egypt, Turkey, Myanmar, China and Pakistan.
On top of this, the ministry is working to widen subsidised onion sales through the TCB.
According to officials, the TCB is already selling onions on a small scale and may expand this month-long drive nationwide if necessary.
Long queues were observed at various TCB sales points in Dhaka, with many consumers desperate to buy onions. However, not everyone was able to secure some.
To counter the price rises, the Directorate of National Consumer Rights Protection (DNCRP) conducted kitchen market raids across the country. Rights directorate's divisional and district-level teams fined 133 traders during these raids.
A senior commerce ministry official said the government's top priority was to stabilise the price of this essential commodity as soon as possible. He hoped that the price would soon cool down as the local onion harvest was about to begin.
At a seminar on Sunday in Dhaka, Senior Commerce Secretary Tapan Kanti Ghosh criticised businesses for raising onion prices immediately after the latest export ban by India.
"The sudden increase of Tk 70-80 per kg on Saturday is unacceptable," he said.
"It's baffling how the price of onion can jump from Tk 120 to Tk 200 overnight," he added.
He reminded businesses that they have a responsibility to the public and that profits should not be prioritised over fair prices.
Speaking at a seminar on the occasion of National VAT Day and VAT Week-2023, the top bureaucrat said his ministry recommends reducing customs duties on essential commodities to make them more affordable for the 170 million people of Bangladesh.
He said that rising prices of essentials are a political issue that affects ordinary people.
"We also recommend cutting trade taxes to promote industrialisation, but we never ask for direct tax exemptions," he said, emphasising the need to reduce dependence on customs taxes.
The ministry is exploring the possibility of introducing seasonal tariffs on imported essential commodities that are also produced locally so that Bangladeshi farmers get fair prices. "It is difficult to control commodity prices by deploying police," he commented.
On the topic of new avenues for domestic revenue mobilisation, he said that the National Board of Revenue (NBR) could impose taxes on e-commerce businesses by establishing interconnectivity with the Digital Business Identification (DBID) System.
He also acknowledged the high expectations people have from the NBR, citing its power to reduce inequality.
"As a commerce secretary, I have received more complaints about the NBR than any other entity," he added.
Mr Kanti suggested that the commerce ministry only recommends tax cuts after receiving requests from industry insiders and that the NBR must conduct thorough analyses before implementing any changes.
He stressed the responsibility of businesses to collect and deposit VAT from consumers, even if they do not request invoices.
Bangladesh eats away more than 2.5 million tonnes of onion per year. The demand soars to some 0.40-0.45 million tonnes for the month of Ramadan alone. According to official data, onion production without estimating crop loss was 2.7 million tonnes until May 2023.