Imports from India make up almost 90% of Bangladesh's shortfall
Indian authorities are considering allowing the movement of onion supplies already contracted by Bangladeshi importers after Dhaka formally complained about the impact of New Delhi’s ban on exports of the commodity.
Scores of trucks carrying onions on the way to Bangladesh have been halted at the border crossings in West Bengal after the Directorate General of Foreign Trade banned all exports of the item on Monday following a shortage and sudden increase in prices in the domestic market, reports Hindustan Times.
As prices spiked in Bangladesh after the ban, the Foreign Ministry in Dhaka formally complained to the Indian High Commission through a note verbale or unsigned diplomatic correspondence on Tuesday, people familiar with developments said.
The matter was also raised by the Bangladeshi mission in New Delhi, the people said on condition of anonymity.
Foreign Secretary Harsh Shringla, who visited Bangladesh on August 18 to put bilateral ties back on track, has taken personal interest in the issue and is trying to help find a solution, said the people.
“One option is allowing the shipment of all onion supplies that were contracted by Bangladeshi importers before the ban came into effect. A solution is expected soon,” one of the people cited above said.
This is the second time in less than a year that an Indian ban on onion exports has had an impact on Bangladesh and resulted in a formal reaction from Dhaka.
Bangladesh Prime Minister Shiekh Hasina formally raised the earlier ban during a visit to New Delhi last October. She had also said the Indian side should give advance notice of such bans.
The note verbale from Bangladesh’s foreign ministry expressed “deep concern” at the Indian ban as it “directly impacts the supply of essential food items in the Bangladesh market.”
It noted that at a meeting of the commerce secretaries of the two sides during January 15-16: “Bangladesh side requested the Indian side to consider not imposing export restriction on essential food items required by Bangladesh, and in case of any event necessitating such a restriction, it was requested that Bangladesh side be informed ahead of time.”
The latest ban, the note verbale said: “Undermines the discussions that took place in 2019 and 2020 between the two friendly countries on the matter and understanding shared.”
The Bangladeshi side is concerned as the sudden ban triggered panic buying by the public and hoarding by unscrupulous traders, who bought available onion stocks and then artificially drove up prices, the people said.
Bangladesh is largely able to meet its annual requirement of about 2.5 million tons of onions from domestic production but imports from India make up almost 90% of the shortfall.
As it did last year, Bangladesh may turn to Turkey and Egypt to make up for the deficit in supplies.