However, the retail price of imported onion was comparatively stable Monday
The retail price of locally grown onions varied greatly in the capital Monday, ranging from Tk75 to Tk90 per kilogramme by area.
Meanwhile, the price of imported onions was comparatively stable – at Tk65-70 a kilogramme.
Onion prices had been spiralling on the local market since the first week of September. On September 14, neighbouring India banned the export of the key cooking staple, and the rising prices almost doubled, with onions retailing for Tk120 per kilogramme overnight.
After days of a buying frenzy, the price of the cooking essential came down to Tk75-90 as skyrocketed demand started dropping.
The bulb was Tk75-80 per kilogramme at Dhaka's Mohammadpur Krishi Market Monday, while Rampura traders were selling onions at Tk85-90.
"Wholesale onion prices fell slightly, but our stocks were purchased prior to the price fall and therefore we had to sell them at hiked prices," said Aminul Islam, a grocer in Dhaka's Rampura area.
Local onions were at Tk65-70 per kilogramme at the Shyambazar wholesale market Monday while the imported onions were Tk50-55. Both the prices were almost unchanged from Sunday.
People working to protect consumer rights said though several government agencies are monitoring the market, a poor surveillance mechanism is failing to tame the soaring market.
Neither bringing in stranded onion-laden trucks from India to Bangladesh Saturday, nor having the state-run trading corporation sell onions at Tk30, nor bringing in Burmese onions onto the market has worked; onions are still more expensive than usual, they noted.
Executive Director of Conscious Consumers Society (CCS) Polash Mahmud said importers are primarily behind the price hikes. But both the wholesalers and retailers should be blamed for the soaring cost.
"The current prices are still much higher than usual. We lack in monitoring the market," he added.
Shariful Islam, a wholesaler in Dhaka's Shyambazar, also pointed a finger at onion importers. He suggested conducting drives at the import stage of the cooking ingredient.
"The matter is very simple. You have to calculate when an importer brought the onions to the country, at what prices he brought them in and at what rate he is selling them. If you can do it, the prices will automatically go down," Shariful explained.
When contacted, Deputy Director of the Directorate of National Consumer Rights Protection Md Masum Arefin said they are monitoring the market round the clock.
"We take legal action as soon as any irregularity is found," he added.
In the meantime, sources at Sonamasjid Land Port said truckloads of onions have been driven back to India from the border as the cooking items had rotted after being stranded for nearly a week.
From India, 208 tonnes of onions were able to make their way into the country through the port on Sunday and Monday. Bangladeshi importers said nearly half of the consignments were rotten.
Onions can be imported on 90-day credit
To ensure the uninterrupted supply of onions and stabilise the prices on the local market, the Bangladesh Bank, Monday, allowed onion imports on credit for 90 days.
With the authorised dealer banks, onion importers will be allowed to open letters of credit (LC) on a 90-day deferred or usance basis, under the credit terms of suppliers or buyers, said the central bank in a circular issued Monday.
A central bank official told The Business Standard, "The interest rate will be calculated at six-month London Interbank Offered Rate (LIBOR) plus 3.5%. At present, the six-month LIBOR is 0.27% – which means the total interest will approximately be 3.77%."
Earlier on Thursday, the Bangladesh Bank also instructed banks to open LCs for the import of onions, with a minimum margin from the importers.
The official said, "Generally, importers must deposit 10% of a product's value as a margin while opening an LC. But for importing onions, we have instructed banks to take a minimum margin."
According to the central bank official, the minimum margin could be 1% so that the importers can invest the rest of their money in other sectors.