Though consumers got some relief for an increased supply of newly harvested onions, Bangladeshi farmers fell into despair as India has lifted its export ban on the spice during this peak harvesting season, said insiders.

The prices of onion dropped sharply in the country’s onion growing hubs just in a day as farmers fear that Indian onion would flood the domestic market within a week.

The government of India on Monday lifted the ban on exports of all varieties of onions from January 1, 2021.

Prices of newly harvested early seed variety ‘murikata’ declined to Tk 25-26 a kilogram in Rajbari, Faridpur, Jhenaidah, Meherpur, Pabna and Natore at farmers’ end on Tuesday noon which was trading at Tk 33-Tk 35 a kg on Monday, according to the Department of Agricultural Marketing (DAM).

Md Akmol Hossain, DAM in-charge in Rajbari district, said onion prices started declining from Tuesday as many traders from distant districts minimized their orders.

Production cost of onion has increased to Tk 24-26 a kg this year due to higher prices of seed and other inputs, he said, adding that cheaper imports might hit local farmers hard.

Retail prices of the spice also declined by Tk 5.0 a kg in Dhaka on Tuesday as ‘murikata’ was sold at Tk 45-Tk 55 a kg.

According to traders, imported Chinese, Egyptian and Dutch onions were available at Tk 28-Tk 40 a kg depending on quality.

Indian onion export will begin from January 1, 2021, according to a notification issued by India’s Directorate General of Foreign Trade on Monday.

Earlier in September last, India banned exports of all varieties of onions to cap its rising prices in its domestic market.

The decision caused a tectonic rise in onion prices in Bangladesh as cost fueled up to Tk 100-110 a kg from Tk 35-50 a kg in September, according to Trading Corporation of Bangladesh (TCB).

Later, quick initiatives by the government and the private sector to import the spice from global alternative markets helped easing prices to Tk 40-Tk 70 a kg based on varieties, said TCB.

However, higher prices of the crop have encouraged hundreds of local farmers to grow onions this season, according to the agriculture ministry.

Narayan Chandra Saha, proprietor of Nobin Traders, a Shyambazar wholesale based trader in the city, said they were selling new local onion at Tk 32-33 a kg now which was Tk 36-38 a kg on Monday.

“Both farmers and traders will incur losses if Indian onion enters without any restrictions.”

Chattogram-based traders who have already brought a big chunk of the spice from China, Egypt, Turkey and Netherlands will suffer heavy losses, he added.

Besides, Mr Saha said, many Dhaka-based traders who have made contracts with local onion growers are going to incur losses.

Department of Agricultural Extension (DAE) said onion is expected to be cultivated on 0.259 million hectares of land this year while it was 0.23 million hectares last year.

A total of 0.1 million hectares have already come under farming as of December 28 while 1.2 million farmers are involved in onion production.

The agriculture ministry is expecting 2.9 million tonnes of onion this season.

Agricultural economist Prof Golam Hafeez Kennedy said both the farmers and traders are going to incur loss if the government doesn’t restrict imports for next four months.

He pointed out that if the farmers incur losses, it could discourage them from being regular in such spice farming which ultimately might hurt supply in the last quarter of every year.

“The government has also set target to make the country self-sufficient in onion. So, it will not be possible without involving farmers.”

The country produced above 1.97 million tonnes of onion during the 2019-20 season against maximum demand for 2.6 million tonnes, according to the Bangladesh Bureau of Statistics (BBS) and the commerce ministry.

The country also imports 0.7-1.1 million tonnes of onion annually from India, Myanmar, Egypt, Turkey, China, Pakistan and Netherlands to meet the shortfall.

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