Onion prices in Dhaka markets see sharp drop as new supply rises

Onion prices in Dhaka city markets on Tuesday witnessed a significant decline due to an increased supply of new onions.

Retail onion prices decreased by at least Tk 30 per kg in the capital’s markets following a major price drop in top producing areas, according to local media reports.

Traders in key Dhaka markets such as Malibagh, Moghbazar, Karwan Bazar, and Shyambazar said that new season onion supply has increased, leading to wholesale prices between Tk 45 to 55 a kg depending on quality.

Retail prices range from Tk 60 to 70 per kg, they added.

"Farmers started to quickly harvest and sell their new onions after hearing of possible imports from India, resulting in a rise in the market supply and thus a price fall," said Shafiqul Islam, an onion trader in Karwan Bazar.

This price fall in onion prices follows a period when onion prices surged – in the run-up to this holy month of Ramadan. However, timely arrival of new season onions has lessened the market pressure, according to traders.

According to Trading Corporation of Bangladesh (TCB), local onion prices in Dhaka city were now selling at Tk 60-70 a kg, down from Tk 90-110 a kg last week.

TCB data also shows a 41 per cent decrease in onion prices over the past month.

Earlier on Monday, wholesale markets in the Sujanagar and Santhia upazilas of Pabna—one of the main onion-producing districts in the country— saw prices halve in just five days, frustrating farmers.

The price of a maund of onions dropped to a range between Tk 1,600 and Tk 1,800, down from a previous range between Tk 3,000 to Tk 3,200.

Local farmers and wholesale traders attributed the price drop to a sudden spike in the market's supply.

They explained that some unscrupulous traders, who had stockpiled onions, released them into the market to sell at a higher price during Ramadan.

Meanwhile, they added, farmers have also started harvesting new onions and marketing them, resulting in the supply glut and thus a sharp price fall.

However, despite such a price fall, at the present price range of onions, farmers will not incur any loss, Jamal Uddin, deputy director of District Agriculture Extension Department, believed.

Onion importer Narayan Saha of Shyambazar said on Tuesday that new onions have now come to the market, and its impact on the market is quite obvious.

He suggested that onions not be imported for now if onion farmers are to be given a protection from loss. Otherwise, farmers may incur a loss.

He also emphasised the importance of proper onion preservation to ensure price stability for the rest of the year.

As onion prices in recent months went through the roof, the government requested India to export onions under its quota facility for neighbours. In response, the Indian government assured Bangladesh of exporting 50,000 tonnes of onions.