The key spice was traded between Tk 65 and Tk 75 per kg on the day.Govt sits with traders today as onion prices keep soaring

Prices of onion increased further by Tk 5.0 a kilogramme in the city's retail markets on Monday.

The key spice was traded between Tk 65 and Tk 75 per kg on the day.

Traders, however, attributed the price hike to higher import costs of Indian onion.

In the wake of an unusual hike of the onion price, Trading Corporation of Bangladesh will finally start its open market sale (OMS) from today (Tuesday) in some places of Dhaka city.

Though the commerce ministry decided to launch the OMS of onion from Monday, the TCB couldn't start it due to lack of its preparations, said officials.

Onion prices witnessed a Tk 15-Tk 20 hike at retail and Tk 14-Tk 16 a kg at wholesale markets in last three days after the Indian government announced its decision to raise minimum export price (MEP) to US$ 850 a tonne, said insiders.

The neighbouring country took the decision following a surge in onion prices in its own states. Onion was retailing at over 50 rupees (Tk 57) in its different states, according to Indian news agencies.

While visiting the Shyambazar wholesale market in the city on Monday, the FE correspondent found that both local and imported Indian onions were selling at Tk 60-Tk 65 a kg, Tk 2.0-Tk 3.0 hike in a day and Tk 13-Tk 15 a kg in last two days.

TCB recorded a 27-30 per cent surge in onion prices in just two days at retail markets.

Abdur Rahman, a Shyambazar-based spice importer, said prices of onion will increase further when their stock will run out.

He said India exporters almost stopped taking new orders following a sharp rise in prices in their country.

It would cost them Tk 75-Tk 78 to import one kg of Indian onion now, he added.

Meanwhile, TCB couldn't start its OMS operation on Monday due to unavailability of the spice in its warehouse, said sources.

TCB spokesperson Humayun Kabir said that they are going to start OMS of onion from Tuesday morning from only five points of the city.

As there was no stock of onion in their warehouse, he said, they couldn't start operation from Monday.

They were sourcing onion from the domestic market to provide 5.0 tonnes of the spice from five points of the city every day, he added.

The trucks will be available at Bak Chattar in Motijheel, Secretariat Gate, Mohammadpur and Farmgate.

He said anyone could buy 2.0 kilogrammes (kg) of the spice from truck sales.

However, OMS price of onion was not fixed till Monday when the report was filed at 7.35 pm.

Against a backdrop of the soaring price of onion, the government sits with its officials concerned and traders today in a bid to devise strategies for keeping the price of the produce stable in the local market.

The meeting is scheduled to take place at the commerce ministry. Commerce Minister Tipu Munshi will preside over the meeting.

Representatives from top importers, retailers, wholesalers and government officials as well as leaders of different trade bodies including FBCCI are expected to attend the meeting, according to a commerce ministry announcement.

However, a meeting was also held on Monday at MoC with the commerce minister in the chair.

A letter had been sent to the Bangladesh Bank, asking it for taking necessary steps to lessen L/C (letter of credit) margin and interest rate on credit for onion import.

Steps had also been taken to speed up the delivery process of imported onion from ports and its uninterrupted transportation to help stabilise its prices, according to the MoC press release.

Consumers Association of Bangladesh (CAB) secretary Humayun Kabir Bhuiyan said leading importers and their allied traders raised the prices of onion overnight

Terming price hike illogical, he said traders were selling onion from their older stocks which they sourced only at Tk 24-Tk 32 a kg both from India and the domestic market.

He said monitoring on the kitchen market is almost absent which encourages the syndicate to earn windfall profits by making the market volatile.

"The price of imported onion might rise but what about the local variety?" he questioned.

He said the capacity and manpower should be increased to strengthen the state-run TCB.

Bangladesh produces 1.8 million tonnes of onion in 2019 against its demand for 2.2 to 2.4 million tonnes, according to MoC.

The country also imports 1.1 million tonnes of onion mostly from India against its 0.4 to 0.6 million tonnes of deficit.