The onion market is not decreasing, what is the solution?

The onion market is not decreasing. Data shows that it has increased by up to 50 percent in a few months. To keep the price bearable, the government announced imports from several countries, including India. However, compared to the number of applications, not much has been opened for letters of credit (LC). Out of 2,000 applications, LCs have been opened for only 200 tons. And, analysts advise waiting until new onions come to the market to reduce prices.

The empty talk of the Ministry of Commerce, the announcement of import by lifting customs duties, has not happened at all. It can be seen from several markets in the capital that onions are now being sold at 104-105 taka per kg in wholesale, while the retail price is up to 130 taka.

Even though there is not much difference in production and demand, why does the price of onions increase towards the end of every year? The main reason for this is that the season of the product ends at this time. As a result, a shortage is created due to the lack of storage facilities.

Consumers Association of Bangladesh (CAB) Vice President SM Nazer Hossain said that the initiative to solve the problem should be taken in advance. If any initiative is taken at the last minute, consumers will be affected.

He said that traders try to increase prices by creating a crisis. The administration or the Ministry of Commerce knows this tendency to snatch money from people's pockets. Therefore, they should have taken the initiative in advance. The Ministry of Commerce needs to decide the focus, when imports can be opened, when they will be closed.

He also said that there needs to be a plan according to the calendar. When a crisis arises due to lack of a plan, our minds are shaken. Due to this, traders get opportunities. We do not see that initiative whether our stock products can be brought to the same channel for distribution.

A report by the Tariff Commission shows that the price of onion has been in the hundreds of rooms in November for the past 3 years. In November 2023, the average price of onion was 115 taka, which increased to 130 on 24 and 105 taka this year. As a result, we have to rely on imports, almost 100 percent of which comes from India. Wherever the crisis begins.

Analyzing the data of the Central Bank, it can be seen that onion imports have decreased by 1/20th of a percentage point compared to the same period last year until October. While 246,000 tons of onions were imported until October last year, only 13,000 tons have been imported so far this fiscal year. At the same time, the opening of LCs or letters of credit has decreased by about 99 percent. Until October 2024, 128,037 metric tons were imported, which is only 203 tons this time. Although about 2,800 applications have been submitted to open LCs during this period, which is mainly done around Ramadan.

According to the Central Bank, about 482,000 tons of onions were imported in the last fiscal year. And about 3.2 million tons were produced.