‘Onion imports should be banned during peak production’

Masud Milad | Update:

Mohammad IdrisWith drastic drop in supply, the price of onions has been shooting up over the past few months. Mohammad Idris, general secretary of the Hamidullah Miah Market Welfare Association in Khatunganj, Chattogram, the wholesale onion hub, speaks to Prothom Alo about the present onion market, the reasons behind the volatile prices and how the government should bring things under control.

Prothom Alo: What is the reason behind the volatility in the onion market?

Mohammad Idris: We are dependent on India for our onions. The crisis was set off when India stopped its exports. Last month a certain amount of onions were imported from India against an old L/C. Onion import from Myanmar also increased. Prices went up, but there were onions in the market. But now onions aren’t coming in from India and import from Myanmar has decreased, too. The demand has shot up much more than supply and so the market has become volatile. The crisis in supply has caused the prices of onions to shoot up. Had the supply been adequate, prices would not have risen so high.

Prothom Alo: How is the Khatunganj market doing?
Mohammad Idris: At Khatunganj, some have onion in stock and some do not. Since retailers all over the country buy onions from Khatunganj, there is a quite a hue and cry. There is a daily demand for 2000 tonnes of onions, but on average hardly 100 tonnes arrive. Supply isn’t meeting demand and prices are soaring.

Prothom Alo: The Chattogram district administration has said that the businessmen are importing onions at just Tk 42 per kg, so why are prices so exorbitant?

Mohammad Idris: There is a huge gap in information here. If you check the Teknaf land port, it is said that for one and a half months onions have been imported at Tk 42 per kg, or 500 dollars per consignment. Can the price of any product remain exactly the same for one and a half months at a stretch? The fact is that onions are being imported from Myanmar for Tk 100 per kg, but the customs are not showing this on their records. So based on this incorrect information, the district administration fixed the wholesale price of onions at Tk 80 to 85 per kg. When a drive was launched in this regard, the importers simply reduced their imports. After all, no one is going to import onions for Tk 100 and sell these at Tk 85.

Prothom Alo: What should be done to bring the onion market under control?
Mohammad Idris: It’s too late. The crisis in the market has been lingering for one and a half months. This situation wouldn’t have arisen if the government had properly monitored the demand, supply and shortfall and taken action accordingly.
The businessmen should have been given enough reassurance so that they would import onions. The government should also have imported onions from Myanmar or other countries through TCB (Trading Corporation of Bangladesh). Instead of doing that, they discouraged the small importers by saying that a large consignment of onions would arrive in November, that India would soon lift its ban on onions. It’s mid-November now, but there is no sign of onions. India hasn’t lifted its ban either. Imports have dropped and the crisis has exacerbated.
If the government really wants to reach a sustainable solution, onion import must be banned during peak production season for local onions. If imports are stopped, the local growers will get a good price. Once they get good prices, they will increase production the next season. It will not take long for the country to be self-sufficient in onion production.

Prothom Alo: When will the market return to normal?
Mohammad Idris: That is difficult to predict. If India withdraws its ban tomorrow, the market would return to normal tomorrow. Again, if 2000 to 3000 tonnes of onions are imported daily from countries like Egypt, Turkey or China, then too normalcy could be restored. If adequate supply came in from these countries, the price of onions would fall below Tk 80 to 85 per kg. It costs around Tk 50 per kg to import onions from these places. The onion harvest will enter the market around the end of December and beginning of January, so prices may fall then too.

Prothom Alo: The administration has launched a drive against onions being sold at high prices in the wholesale market. What is your reaction to this?
Mohammad Idris: Basically onions are sold from Chaktai-Khatunganj. The importers send onion to the wholesale market here and they fix the prices then. The wholesalers sell the onions according to this price. The stockists get 50 paisa per kg on their sales. No matter what the price may be, the stockists do not get more than the fixed commission. Now, however, many of the importers are not sending their imports to Khatunganj and so the stockists are purchasing onions themselves and selling this. Unless the importers decrease their prices, there is no reason for the price to fall in the wholesale market either.

* This interview appeared in the print edition of Prothom Alo and has been rewritten in English by Ayesha Kabir

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