2 govt wings discouraging onion import to protect local farmers
With Indian onion starting to reenter Bangladesh after a six-month export ban, two government wings are up for discouraging the arrival of the tuber to protect local growers from price slumps amidst ongoing harvests.
The agriculture ministry recently requested the commerce ministry to discourage the import of the popular item, consumed as a spice and vegetable.
Meanwhile, the Bangladesh Trade and Tariff Commission (BTTC) suggested imposing regulatory duty of up to 35 per cent to make imports costly, according to a recent report obtained from the commerce ministry.
"We have already requested to discourage imports," said Agriculture Secretary Md Nasiruzzaman over the phone.
The agriculture ministry is also not issuing fresh import permits from its plant quarantine office as part of its strategy to ensure fair prices for farmers, he said.
An importer has to get permits prior to opening letters of credit, according to Md Azhar Ali, director of Plant Quarantine Wing under the Department of Agricultural Extension (DAE).
Current imports are taking place based on permits the ministry had issued earlier to tackle shortages in the domestic market, Nasiruzzaman said.
The recommendations coincide with the arrival of fresh harvests at the markets, which, along with the lifting of the ban, has resulted in a slump in prices, traders said.
India imposed the ban on September 29 last year, causing the prices of the key cooking ingredient to skyrocket to a historic high of Tk 250 per kilogramme (kg) on this side of the border.
Bangladesh imports roughly 10 lakh tonnes of onion a year, mainly from India.
Imports resumed yesterday with over 2,100 tonnes of the bulb crossing through three land ports -- Benapole, Bhomra and Hili.
The majority, 1,938 tonnes, entered through the Bhomra land port in the southwest border district of Satkhira, said customs officials and importers.
"Farmers are harvesting onion and import of onion at this moment will affect them and they will feel discouraged to produce the bulb next season," said Narayan Saha, an onion wholesaler at Shyambazar, one of Dhaka's biggest wholesale markets.
He said production has been good this year and it would reduce import requirement.
Farmers here increased their cultivation area by 15 per cent to 2.37 lakh hectares this season, showed the DAE data.
The agricultural extension office estimated that 23.30 lakh tonnes of onion was produced in the previous season.
The BTTC report said locally produced onion accounts for 70 per cent of the annual demand and producers bag onions during the January-April period. Bulbs harvested in the March-April period can be stored for consumption during the off season.
Prepared to suggest measures to encourage an increase in domestic cultivation, the report estimated that farmers' net production cost this fiscal year to be Tk 12 per kg. Their expectation is Tk 20.
The BTTC, in its report submitted to the commerce ministry, said there were no import tariffs on the key cooking ingredient and imposition of regulatory duty could be considered to protect domestic producers.
"But such duty can be on levied for four months from the February to May period of a year," said the report, suggesting regular monitoring of production, export price and supply to ensure smooth supplies to the market.
Yesterday, retail prices of the locally grown onion stood at Tk 40-Tk 45 per kg in Dhaka, down 47 per cent from Tk 100-Tk 110 per kg a month earlier, according to data from the Trading Corporation of Bangladesh (TCB).
Prices of imported bulbs, mostly from Myanmar, dropped 41 per cent to Tk 40-Tk 60 per kg yesterday from Tk 70-Tk 100 a month earlier, showed the data.