Onion price nearly doubles overnight to Tk220 per kg

Hike comes soon after India’s decision to extend its export ban on onions yesterday

Following India’s extension of export restrictions, the price of onions in Bangladesh nearly doubled overnight.

On Saturday morning, local onions were being sold at Tk220 in the capital, which was Tk140 a day before.

Meanwhile, imported or Indian onions were Tk200 this morning, up from Tk120-140 on Friday.

According to a notification issued by the Indian Ministry of Commerce and Industry on Thursday (7 December), the country announced an extension of onion export restrictions – minimum export price at $800 and 40% export duties – until 31 March next year.

This decision aims to bolster domestic availability and regulate prices, as stated in the notification’s rationale. 

The notification outlines three conditions under which consignments of onions can be exported. 

These include shipments where loading has begun before the notification, cases where shipping bills have been filed and vessels are already berthed or anchored for loading, and consignments that have been handed over to customs or entered customs stations for exportation before the notification.

Badda grocery shop seller Mizan said, “The onion prices surged in the wholesale market following India’s ban on onion exports. The development has not only escalated prices but also made onions scarcely available. Considering the high purchasing rates, selling local onions below Tk220 is not feasible for us.”

Shariful Islam, a vendor at Dilu Road, said, ” “Usually, I purchase 1-2 sacks of onions daily from the wholesale market. However, today, I could only procure 15 kg due to the soaring prices. Consequently, I have to retail local onions at Tk220 and Indian imports at Tk200. 

“Just yesterday, I sold the same onions for approximately Tk140,” he added.

On Thursday (7 December), the commerce ministry announced price caps for potatoes at Tk35-36 per kilogram (kg), local onions at Tk64-65 per kg, and eggs at Tk12 per piece. Besides, the price of bottled soybean oil was fixed at Tk169 per litre, non-bottled soybean at Tk149, and palm oil at Tk124.

In November 2019, the price of local onions in the country surged to the Tk300 mark.

The Indian export ban follows the Revenue Department of the Indian Finance Ministry imposing a 40% duty on onion exports to Bangladesh on 20 August. Subsequently, the Indian government set a Minimum Export Price (MEP) of $800 per tonne, effective from 29 October, expiring on 31 December.

In May 2022, the Bangladeshi government halted onion imports from India to support local farmers, leading to a spike in onion prices. India’s 2020 export ban on all onion varieties except cut, sliced, or in powder form was implemented to control rising domestic prices amid flood-related production losses.

The annual production of onions in Bangladesh exceeds 3.5 million tonnes, with a demand of around 2.8 million tonnes. Despite high production, the country relies on imports due to significant wastage caused by storage and management complications, amounting to 25% or more of the total onion production.