Opaque onion-price episode

The price of onion, a pungent-tasting tuber, started rising abruptly in the first week of May when the local market was overwhelmed with its abundant supply. The onion market became volatile in the following weeks. The decision taken on June 04 last to lift restriction on the import of the item did the trick, and the prices started declining immediately. In Dhaka city, the price of one kilogramme (1kg) onion dropped 15-20 per cent, even before the first consignment of this essential item imported from India reached any of the Bangladesh land ports.

The latest onion price episode has brought to the fore a few issues that are surely agitating the minds of the consumers who are now paying through their noses for almost every essential item. It has proved, at least partially, the claim of a section of ruling party stalwarts that external factors are solely responsible for the current bout of inflation.

Though statistics available with the Directorate of Agricultural Extension and the Bangladesh Bureau of Statistics differ on the acreage under onion cultivation and production -- such mismatch is very much common in the case of some other major crops -- reports coming from main onion-producing areas have confirmed a bumper production of the item in the country. As the harvest of the vegetable began in March, its prices gradually started coming down to general consumers' reach. However, the onion market, for no plausible reason, suddenly turned volatile in the last week of April last. In the first week of May, the price of onion almost doubled and the price remained stubbornly high.

In such a situation, the commerce minister made a public statement saying that the government might be forced to allow the import of onion---India remains the main source of onion import. The commerce ministry reportedly wrote to the agriculture ministry to allow the import of this important kitchen item. But for mysterious reason/s, the latter dragged its foot on the issue. Meanwhile, the price of onion continued to soar and traded between Tk 85--90 per kg at the retail level.

The question most people are asking is: why could not the agriculture ministry announce its import decision earlier? Allegations are being made, rightly or wrongly, that the agriculture ministry deliberately created an opportunity for the so-called syndicates to fleece the poor consumers.

Consumers in this part of the world are very often subjected to suffering mainly on account of high prices of essential items. Onion is one of those. A couple of years back, following a ban imposed by India on the export of onion, its price had soared to a record high level. The truth is Bangladesh is not self-sufficient in onion production and nearly one-third of its requirement needs to be fulfilled through import. So, instead of imposing a ban on the import of the item, the government may fix a duty rate for onion taking into cognizance the cost of production of the item at the growers' level. This would, possibly, help protect the interest of both farmers and consumers.

The abnormal price escalation of onion and the instant reaction of the market to the government's decision to allow its import put to question the competence and integrity of the government agencies responsible for overseeing the market. There are certainly notable weaknesses in the management of the economy at macro levels. External factors certainly did have a role in the current price situation at home. But most of those factors have eased to a great extent in recent months. There is no reflection of the same on the price situation because of the effective remedial measures. That is why issues concerning management capability arise.

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