Onion farmers stare at 24pc loss for price debacle in FY25

Onion farmers in Bangladesh have incurred a staggering 24 per cent loss this fiscal year, as they failed to recover their production costs due to abnormal price volatility on the domestic market, according to the latest Bangladesh Bank survey.

The survey report titled "A Study on Value Chain Efficiency of the Agricultural Products in Bangladesh" attributes the abnormal price volatility to the influence of middlemen and the impacts of natural disasters.

The central bank conducted the study between January 5 and 16 this year, covering the value chains of five essential commodities - rice, onion, potato, egg, and broiler chicken - to analyse the value chains and price-setting mechanisms of such products and identify the actors influencing price volatility and inflation.

However, the findings are based on responses from only 195 participants, which the bank acknowledged as a limitation in terms of sample representation.

According to the survey, growers of Murikata (seed) onion spent an average of Tk 54 a kg on production this season.

However, they sold the onion for an average price of only Tk 41 a kg, resulting in a net loss of 24 per cent.

The selling price ranged from a minimum of Tk 35 to a maximum of Tk 48 per kg.

"This year's situation is markedly different from the last," noted the survey team.

"Heavy rains and a significant expansion in Murikata cultivation have contributed to the oversupply and subsequent price fall," it said.

Data from the Department of Agricultural Extension (DAE) offices in Rajbari and Faridpur revealed that farmers exceeded their land-use targets for Murikata onion farming in 2025.

Despite two episodes of heavy rainfall during the growing season, overall production surpassed expectations, flooding the market.

The report further explained that the high profits from the previous season - fuelled by a supply shortage and delayed imports - encouraged more farmers to cultivate onions this year.

This boom in cultivation, paired with higher input costs for seeds, labour, and land rent, drove up production costs significantly.

Compounding the problem is the perishability of Murikata onions due to their high moisture content, making long-term storage difficult. Farmers, therefore, had to sell quickly - often at a loss - to avoid spoilage.

The report noted that middlemen (foria/bepari) and retailers made modest profits, while farmers bore the brunt of market losses.

The Bangladesh Bank study suggested onion paste production as a potential preservation method to reduce post-harvest losses and extend marketability.

It also proposed well-timed imports during the lean season - especially in September and October - to help stabilise the market without hurting domestic growers.

"Strategic planning in both cultivation and market management is essential to prevent farmers from falling into a cycle of loss," the report said.

The report, however, said staple food rice makes up over 10 per cent of the consumer price index (CPI) basket and dominates agricultural output.

However, inefficiencies in the rice value chain due to excessive middlemen, speculative trading, post-harvest losses, and delayed government procurement lead to volatility and price hikes.

Addressing these issues through policy reform, infrastructure investment, and improved market governance is critical for sustainable agricultural growth and food price stability, the report noted.

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