Onions pick an extra Tk 2.02b from consumer’s pockets
Onion consumption has fallen in the country with its spiralling prices. Even so, expenditure has shot up and around Tk 2.02 billion (Tk 202 crore) has been filched from the consumers’ pockets in the one and a half months since India stopped exporting onions.
According to the National Board of Revenue (NBR), 52,094 tonnes of onions have been imported in the one and a half months from the time that India banned onion export on 29 September till 14 November. This import has entailed a cost of USD 25.4 million or Tk 2.41 billion (Tk 241 crore).
The Trading Corporation of Bangladesh (TCB) records show the average retail price of onions at the time was Tk 103 per kg. The cost of the total imported amount of onions was Tk 5.36 billion (Tk 536 crore).
Based on the the price of local onions according to a study by the Department of Agricultural Marketing, the sales price of that amount of onions could be Tk 3.34 billion (Tk 334 crore). This indicates that the market crisis and demand has forced consumers to pay an additional Tk 2.02 billion (Tk 202 crore) for onions.
Market analysts said that it was natural for onion prices to go up when India stopped exports, but it was unjustified for prices to shoot up to Tk 250 per kg. Had there been proper supply and supervision of the market, the consumers would not have had to pay such exorbitant additional costs.
Research director of the Centre for Policy Dialogue (CPD), Khandakar Golam Moazzem, on Thursday told Prothom Alo that when there is a shortage of an essential item in the market, the sellers take advantage of the situation. And as the item is essential, the consumers are obliged to buy it. The fixed-income consumers suffer.
He said that this additional cost could have been avoided had the government taken measures earlier to import onions or encouraged the private sector importers to do so.
When India halted onion export, Sri Lanka simply turned to other countries to import the item. According to Sri Lanka’s central bank, after the Indian export ban, the price of onions there went up from 78 to 142 rupees per kg. Then with increased imports from Pakistan, Egypt and China, prices fell to 58 rupees per kg.
Onion importer Selimul Huq told Prothom Alo, it was abnormal for the price of onions to shoot up to Tk 250 per kg. Even if prices went up after the Indian ban, it should not have gone up to that extent. As the imported onions did not enter the market soon enough, an unstable condition was created. Also, if the traders were not cracked down upon, huge amounts of onions would have been imported and no one could have taken advantage of the situation.
On average, over the last one and a half months, 35,000 tonnes of onion were imported from Myanmar, 11,738 tonnes from India (before its export ban) and around 3500 tonnes from Egypt. Onions were also imported from Pakistan and Turkey.
According to the information provided by the importers to the customs department, the average purchase price of onions per kg is Tk 46 and this will go up to Tk 54 at the importer level, taking into account overhead charges and profit margin. At the wholesale level this can go up to Tk 57 and then at the retailer level, Tk 64 per kg.
* This report has been rewritten in English by Ayesha Kabir