IN THE context of an unstable onion market, the government has recently started importing onions. The increased supply has, however, failed to contain the price. After months of suspension, about 2,280 tonnes of onions have entered Bangladesh through the land port of Satkhira since August 10 but have made little to no impact on the retail price of onions. Market sources at Shyambazar and Karwan Bazar in Dhaka and Khatunganj in Chattogram say聽 that onions were selling for Tk 65鈥�70 a kilogram on the wholesale market, down by Tk 2鈥�3 a kilogram from the past week. This slight reduction has, however, not impacted retail prices as onions was retailed for Tk 80鈥�85 a kilogram at Dhaka kitchen markets on August 21. Wholesalers say that high domestic demand, limited import and significant waste of the locally produced onions during harvest prevent retail prices from falling. They warn that prices are unlikely to decrease until new supplies arrive at the market. The import of onions was, however, put on hold on August 21. It is evident from the price instability in the onion market that an increased supply alone will not solve the crisis.
In recent times, onion market instability has been largely resulted from the nexus of unscrupulous traders and their attempt at hoarding onions to create an artificial shortage. Many speculate that similar market manipulation may also have contributed to the soaring price of onions this year. In addition, heavy rain during the harvesting season and lack of cold storage have resulted in the waste of more than 20 per cent of the harvest. It is not that the onion market alone is unstable. Prices of almost all essential goods, including eggs, broilers聽 and vegetables, are high on the market in the capital. In the past week, seasonal vegetables registered at least a Tk 20鈥�30 increase a unit at neighbourhood markets. Traders blame the weather conditions and say that during this time of the year, farmlands remain damp or inundated which limits vegetable cultivation and reduces the supply. The weather condition that the traders mention as a contributing factor to supply disruption leading to price increase is an annual seasonal reality. It only suggests that the traders use every excuse to arbitrarily increase commodity prices. It also indicates that the government does not have an effective mechanism to protect seasonal market demand and supply.
It is evident the import of onions alone cannot ensure price stability in the onion market. The government should identify the real causes of price instability, enhance cold storage capacity and improve its market oversight mechanism so that unscrupulous traders cannot exploit weather conditions for higher profits or create artificial shortage.
