Just after one year, the onion market has become unstable again. Onion prices are shooting up in the country since India stopped onion exports from Monday. The price hike must be reined in immediately or else the crisis created over onion in last October-November can recur.
The price of onion rose to Tk 300 per kg last November. The prices had started to rise as supplies from India were halted. India banned onion exports on 30 September to control its own market. Onions had to be imported from other countries at that time by air. Many families began cooking without onions. The government could not handle the situation despite a number of attempts.
Onion prices have been on the rise since some time in India. The price hike in the neigbouring country started influencing our local markets too, but India halted onion exports without any prior announcement. This has created a huge imbalance in supply and demand of onions in Bangladesh. According to the traders, the sudden rise in onion prices in Bangladesh is due to the onion price hike in India and the sudden halt of exports.
On Tuesday, five kg local onion was sold at Tk 450 to 480 at Karwan Bazar wholesale market. As per this, the price of local onions in the retail market should be around Tk 100. The Indian onions were sold at Tk 65 to 70 per kg. Even a month ago, local onions were sold at Tk 40 to 45 per kg and Indian ones at Tk 30 to 35.
Another reason for the spiraling price is the tendency to stock out of rumours or fears. With the rise of prices, stocks rise too. During such crisis, opportunistic trade syndicates take the advantage. The people, too, try to increase their stocks as much as they can. For this, the normal demand of multiply during crisis.
India is our friendly neighbour. We import many consumer goods including onion from India. There is no alternative to negotiation, compromise and understanding in mutual trade. India could have fixed a time for the onion importers rather than suddenly halting exports. Such a sudden decision has created instability in Bangladesh’s local market.
According to our traders, there are sufficient stocks of onions in the international market. Many traders have already started import procedures anticipating a halt in exports or a rise in prices. According to Prothom Alo, as of Tuesday, 25 companies have taken permission to import about 12,000 tonne onions from five countries.
Life is already devastated for coronavirus and income of almost all the people have reduced. Costs have increased in various sectors including medical and safety equipment. The abnormal rise in the prices of consumer goods will undoubtedly increase the misery of the people.
The fear that there will be a shortage in onion supply and the prices may go up was always there. To avoid a recurrence of the crisis in last year, the ways to import onions should be simplified and made easily accessible. If necessary, incentives should be given and the delays in the import process should be reduced too. Markets must be monitored regularly and hoarding must be prevented by strict measures to prevent the trade syndicates taking any advantage.
It is also crucial to monitor that the people should not stock onions for fear of further rise in prices. It is inappropriate to compete to buy more than needed during crisis.