Onion prices plummet amid drop in demand

Prices of onion are plunging rapidly after peaking at Tk 250 a kg at the end of last week.

Wholesale prices of the kitchen staple have fallen by at least Tk 70 per kg in Dhaka in the space of two days but its effects are yet to be seen at retail markets.

Wholesalers attribute the drop in prices to a reduced demand for the product.

Turbulence in the market forced retailers to purchase fewer onion stocks while households are also shying away from cooking with the ingredient.

Onion prices began soaring after India banned the export of the commodity in Septemper. Prices of local produces crossed Tk 250 at the end of last week while the prices of imported onions exceeded Tk 200.

On Monday, wholesalers at Old Dhaka's Shyambazar were selling local variety of onions between Tk 150 and Tk 160 a kg. Onions from Myanmar were being sold for Tk 150 a kg while partially rotten stocks were selling for Tk 80. Imports from Turkey and Egypt were priced between Tk 100 and Tk 120 a kg.

Prices of onions at the wholesale market in Chattogram's Khatunganj also dropped by around Tk 100 per kg.

"Reduced sales have caused the sudden drop in prices. The price of a sack of onions (40 kg) has come down to Tk 5,000 from around Tk 10,000 in district towns. It seems like it'll fall further," said Idril Ali, a wholesaler at Shyambazar. 

"Thousands of sacks are usually sold a day in Shyambazar. But I doubt whether even 500 sacks were sold today," said Razzak Khan, a shop owner.

"Those who used to buy 10 sacks of onions each day are taking just the one. Everyone is buying fewer onions as prices soared on a daily basis. Partly rotten onions priced at Tk 80-90 a kg are selling better than the good ones."