• Tuesday, Apr 07, 2020
  • Last Update : 01:36 am

Onion leaves scars on market

  • Published at 09:48 pm December 24th, 2019
Onion
Mahmud Hossain Opu/Dhaka Tribune

Other essential items remained pricy

Onion remained the most talked-about essential cooking ingredient in 2019, as it began the year selling for Tk25-28 per kilogram, but ended it selling as high as Tk255 per kg.

Consumers Association of Bangladesh (CAB) data showed onion prices soared by more than 810%, leaving the consumers teary-eyed.

As per the CAB data, the prices of local onion jumped to Tk255 per kg in the country's kitchen markets (as of November), registering a hike by up to Tk227 per kg, but Dhaka Tribune found some retail shops selling local onion at Tk280 a kg.

How it all started

On September 13, the Indian government fixed minimum export price (MEP) at $850 per ton with immediate effect in order to check the price hike of onion in their domestic market. The previous MEP was $250-$300 a ton.

As a result, onion prices started to soar in Bangladesh's kitchen markets.

India banned onion export altogether on September 29, which caused prices to spike in Bangladesh the next day, from Tk50 per kg a week earlier to Tk75 per kg.

To tackle the crisis, the Bangladesh government imported onion from Myanmar, Turkey, Egypt and a few other countries. 

The Trading Corporation of Bangladesh (TCB) began selling onion in open market sale (OMS) at Tk45 per kg on September 17.

However, onion supply did not match the huge demand and long queues were found in front of OMS trucks all across the capital.

Traders and importers said prices increased due to supply shortage.

But as per Bangladesh Bank (BB) data, Bangladesh imported 10.07 lakh tons of onion in 2018-19 fiscal year, mostly from India, while the country needed to import only three lakh tons to meet its local demands.

Bangladesh Tariff Commission and the Ministry of Commerce said the country needed 26 lakh tons of onion annually, while the Department of Agriculture Extension (DEA) said the country produced 23 lakh tons.

It meant 88.46% of the demands of onion could be met with local production and the remaining 11.54% through import.

The government later imported onion from Pakistan, Egypt, and China, but the price of imported onion remained high, ranging between Tk160 and Tk230 a kg, depending on quality.

The crisis cooled slightly after the newly-harvested Murikata variety of onion hit the market. 

As of December 21, it sold in local markets for Tk110 per kg. Onion imported from Myanmar was found retailing at Tk120 a kg, its wholesale price being Tk110 a kg; onion imported from China was retailing at Tk60-70 a kg, its wholesale price being Tk50-55 a kg, onion from Egypt was retailing at Tk120-130 and wholesaling at Tk110-120, and Pakistani onion was retailing at Tk140 a kg, its wholesale price being Tk130-135 a kg.

Older variety of local onion was scarce in the market, selling at Tk240-250 per kg.

Rumour triggers salt panic

On November 19, salt ran out of stock in most retail shops and groceries across the country following rumour that salt, like onion, would be scarce and go out of reach. 

Traders and shopkeepers at different super shops, retail stores and kitchen markets witnessed mad rush as customers stormed in to buy salt, another essential cooking ingredient.

It sold previously for Tk30 per kg, but grocers and traders capitalized on the rumours and sold them as high as Tk70 per kg.

Shopkeepers and customers said that after the price hike of onion, there was a lack of confidence among people which led them to panic buying of salt.

Later the government had to intervene to stop the rumour from spreading farther. Bangladesh Small and Cottage Industries Corporation (BSCIC) data said salt stock in the country was 6.50 lakh  tons on November 15 and the country saw record salt production in 2018-2019 fiscal year - 12.24 lakh tons  - which was much higher than the target. 

BSCIC Chairman Md Mostaque Hassan told reporters that there was no shortage of salt in the country and a vested quarter was spreading rumour with evil intentions.

Other essentials also turned pricy

When the country was grappling with onion crisis, prices of some other cooking ingredients, including rice, sugar and cardamom, also increased towards the end of November. 

The price of rice increased by Tk3-8 a kg and that of sugar by Tk2-3 a kg.

Consumers complained that as no action was taken against the syndicate behind onion price hiking, others dared to increase price of other items.

In the retail markets, cardamom sold at prices higher by Tk1200-1600 a kg, an around 67% increase, currently retailing at Tk3,400 to Tk4,000 per kg. 

Prices of cinnamon also increased by Tk50-60 a kg, retailing at Tk400-420 a kg.

Ramadan was also a difficult time for consumers, as price of chickpeas increased by Tk10-20 per kg to Tk83 per kg.

During Ramadan, Dhaka South City Corporation (DSCC) set the price of beef at Tk525, buffalo at Tk480, mutton at Tk750, and that of lamb at Tk650, but a number of traders were seen charging Tk50 more than the set prices. Besides, broiler chicken which was Tk130 a kg earlier increased to Tk155-165 per kg due to high demand.

During the last week of June, milk also came to make headlines after presence of antibiotics, detergent, coliform and other forms of hazardous bacterial organisms in the pasteurized milk products of five popular local brands was detected.

The research was conducted by a group of teachers of Dhaka University’s Faculty of Pharmacy.

However, the BSTI submitted a report to High Court, saying that it did not find traces of dangerous elements in 18 pasteurized milk samples of 14 brands — including Pran, Aarong, Milk Vita and Farm Fresh.

On the other hand, after proposal of 10% import duty during the budget on milk powder, price of the product increased by Tk20-70 per kg from what they were earlier. 

What expert saying?

Ghulam Rahman, president of the Consumers Association of Bangladesh (CAB), said: “A group of unscrupulous traders take advantage of higher demands and then hike prices accordingly. The government should take strict action against those syndicates.”

"Traders cause crisis," he also said, adding, "The government did not get any help from the traders and importers in stabilizing the market. Even the government had no direct initiatives in the market to increase supply."

The CAB president mentioned that the government should monitor the market more and look into policies which would help the country achieve self-sufficiency.