Onion prices rise as supply shrinks

Onion prices soared after remaining steady for nearly a month, due to reduced supply.

The retail price of the cooking ingredient rose 7 percent to Tk 65-85 a kilogram from last week in the city markets, according to Trading Corporation of Bangladesh.

The price increased for a temporary shortfall in supply, mainly due to transportation problems amid Eid-ul-Azha vacation, said Narayan Chandra Saha, an onion trader at Shyambazar, a wholesale hub in the city.

However, supply began to increase from last night, which put a downward pressure on prices, he said.

After hitting a high of Tk 90 per kg at the end of August due to India's move to curb exports, the prices of onion began to fall from the beginning of September and stayed at Tk 80 a kilogram until Eid-ul-Azha on September 25.

The prices increased after Eid.

Alamgir Hossain, an importer at Bhomra Land Customs Station, Satkhira, said lower quantities of onions are being brought from India, a key source for Bangladesh.

Usually, 40 trucks are loaded a day, but the number has dropped to 20 trucks, he said.

However, Saha and Hossain said prices are likely to start declining this month when new crops start coming in India.

Bangladesh consumes nearly 21 lakh tonnes of onion a year. Depending on local production, the country has to import a portion of onions, mainly from India, to meet its demand.

The country bagged 17 lakh tonnes of onions in fiscal 2014-15, up from 13.87 lakh tonnes a year earlier, according to Bangladesh Bureau of Statistics.