Onion Ah! Onion
Syndicates pocket Tk 4,000cr in 71 days
Published : Thursday, 5 December, 2019 at 12:00 AM Count : 254
Errant onion traders' syndicates had pocketed more than Tk 4,000 crore in only 71 days from (September 23 to December 3) by hiking onion price in the market across the country taking advantage of India's ban of onion export.
Although Bangladesh Institute of Development Studies (BIDS), a state-owned think tank, researchers claimed there was no syndication in the onion market several ministers acknowledged the fact of syndication.
Commerce Minister Tipu Munshi, Industries Minister Nurul Majid Mahmud Humayun and Commerce Secretary Dr Zafor Ahmed have admitted it.
Officials concerned and consumer rights bodies claimed that on September 12 domestic onion was sold in the market at Tk 50-Tk 55 per kg while imported onion was sold at Tk 35-Tk 40.
On September 13 India raised export price of its onion to US$ 852 from $ 350. From the day of India's announcement of onion price hike the price of the item in the country rose to Tk 80-85 a kg. It trend continued till September 23.
After September 23 the onion price soared to Tk 100 and after September 29 when India banned exporting its onion the price jumped to Tk 150.
The price kept going up and now it is hovering around Tk 250 a kg. However, most of the time onion has sold at Tk 220-Tk 230 per kg.
According to the Commerce Ministry, Bangladesh's demand of onion is 24 lakh metric tonnes every year. According to the estimate, it needs around 2 lakh metric tonnes of onion every month while 6,666 tonnes are needed every day.
After the hike in price of onion its consumption by 55 to 60 percent as most of the people are trying to lessen use of onion to offset their monthly expenditure, according to consumers rights bodies.
When contacted, Voluntary Consumers Training and Awareness Society (VOCTA) Executive Director Khalilur Rahman Sajal on Tuesday told this correspondent that around 40 to 50 percent of the consumers have lessened consumption of onion for price hike of the commodity.
"We have conducted a random survey on people of Dhaka city after price hike of onion. We have observed that most of the buyers had lessened use of onion due to price hike. Those, who used five kilogrammes of onion earlier are now using only 1.5 kg to 2 kg per month," he added.
According to the experts, the onion trading syndicate members have pocketed around Tk 59 crore every day on an average and a total of Tk 4,000 crore in around two and half months.
Executive Director of Conscious Consumers' Society (CCS) Palash Mahmood told the Daily Observer that although the onion price had gone up exorbitantly over the last two and half months, the initial price hike started from July 2, one month before the Eid-ul-Azha.
"From July 2 to October 31, the onion price fluctuated 24 times. A strong syndicate is pulling the strings behind this price hike. Despite several steps from the government, the syndicates members have still remain untouched," he added.
"Consumers are being scammed in the name of lower supply and higher import cost of onion. The average cost of importing onion from Myanmar is Tk 34 per kg and the price of per kg onion cannot exceed Tk 50 in any way," Palash said.
According to CCS research report, consumers have lost Tk 3,999.6 crore over the last 71 days for the seemingly artificial crisis of onion and the price hike in the country. It showed that the volatile onion market resulted in consumers losing Tk 825.26 crore in September, Tk 1,465 crore in October, Tk 1,632 crore in November and Tk 177.5 crore in three days of December.
In July this year, the consumers lost Tk397.67 crore while Tk 491.43 crore in August.
The report also said onion price has increased by at least 400 percent in the past four months (from July to October) enabling the onion syndicate to bag an additional Tk50 crore from consumers.
SM Nazer Hossain, Vice-President of the Consumer Association of Bangladesh (CAB) told the Daily Observer, "Dishonest businessmen are making huge profits while farmers and consumers are being deprived."
"The government should monitor the commodity markets properly as the businessmen are increasing essential price irrationally," he added.
While visiting different kitchen markets in the capital this correspondent found that onion was selling in between Tk 220 and Tk 230 per kg in the city's kitchen markets.
Retailers said they were not sure why the wholesalers raised the prices. They are only following the higher market prices controlled by big merchants such as importers and local supply chain.
Sources said businessmen are maintaining huge stocks at Khatungonj in Chattogram, Badamtoli, Shyambazar, Kawran Bazar in Dhaka. The fact is that it is late season when farmers have no extra stocks on hands. Dishonest hoarders are taking advantage of the situation. They have just slowed the unloading of the stock to market purportedly precipitating a crisis.
Bangladesh Tariff Commission sources said the annual demand for onion in the country is 24 lakh tonne at a time when local production varies around 23 lakh tones. Being a perishable item, some estimates say around 30 percent of the stock get rotten for lack of proper storage. As a result, the overall supply shortfall stands at 7.5 lakh tonnes.
Bangladesh imports over 12.71 lakh tonnes mainly from India. That means over five lakh tonnes are still available as surplus in the market. So there is no question of supply shortfall. What is noticeable in the market is an artificial crisis trading syndicates are pressing.
CAB Secretary Humayun Kabir Bhuiyan said some unscrupulous businessmen are increasing the onion price as there is no onion in farmer's hand. Syndicates of importers and wholesale traders set the onion price in country, reaping profit greatly.