Bangladesh bolsters efforts to cool runaway onion prices, urges India to lift export ban

The government has scaled up efforts to cool down spiralling onion prices and urged India to lift its latest ban on exports of the kitchen staple.

Finance Minister AHM Mustafa Kamal said the government is considering the withdrawal of import duty on onion while Commerce Minister Tipu Munshi says it will sell the root vegetable online as well.

The foreign ministry has messaged with the Indian authorities via the high commission in Dhaka expressing its “deep concern” over the abrupt decision to halt exports. 

“We had considered it in the past and we will consider it now as well,” said Kamal at a virtual news conference on Wednesday, when asked about the commerce ministry letter requesting the National Board of Revenue to withdraw the 5 percent import duty on onion until March, 2021.

“We never want our people to suffer. We will surely consider if there's anything for the revenue sector to do,” he added.

Citizens waited in long queues to buy onion at a fair price from the dealers of the Trading Corporation of Bangladesh or TCB, the government's trading arm.     

ONLINE SALE

Munshi said at a news conference at the Secretariat in Dhaka that the TCB will sell onion online as well as through dealers.

The government made the decision to sell onion on the e-commerce platforms considering a staffing shortage at the corporation, he said added, “We really hope to sell 10,000 to 12,000 tonnes of onion at fair prices through e-commerce.”

TCB dealers began selling onion at Tk 30 per kg on Sep 13. One customer is allowed to buy 2 kg onion from the dealers.

To facilitate the sale, the government will import 100,000 tonnes of onion through its trading arm, the commerce minister said.

He also said the government had learnt its lessons from last year’s crisis when India had banned exports in a similar move to control its domestic market.

This time, onion prices have nearly doubled in a day in Bangladesh following the latest curbs.

The retailers in the capital were asking between Tk 85 and Tk 100 for 1 kg of the kitchen staple on Tuesday, up from Tk 60 a day ago.

Consumers rushed to the markets to buy onion fearing further price hike. The prices had skyrocketed up to Tk 300 a kg last year.

Munshi urged people to avoid panic-buying, which he said was one of the reasons behind the sudden price spike.

“We can import from Turkey, Myanmar and China if we get a month. There'll be no problem if we can have patience in the meantime,” he said.  

“We had begun the process to import from other countries [than India] some days ago,” Munshi said. 

Bangladesh will need 1 million tonnes of onion until January while it has 550,000 tonnes in stocks, according to the minister.

Shoppers buying onion at Tk 30 a kg from a dealer of the Trading Corporation of Bangladesh outside the National Press Club in Dhaka on Sep 13, 2020, as the TCB begins selling the kitchen staple at a fair price to cool the market.

FOREIGN MINISTRY WRITES TO INDIA

The foreign ministry urged the relevant Indian authorities to lift the ban on onion exports.

“The sudden announcement of amendment in India's export policy of onions directly impacts the supply of essential food items in the Bangladesh market,” it said in a message sent via the high commission.

It referred to the meeting between the commerce secretaries held on Jan 15-16 this year, when Dhaka asked New Delhi not to impose export restrictions on essential food items in demand in Bangladesh.

The Bangladesh officials had also asked their Indian counterparts to inform them before making a decision on such restrictions.

The message said Prime Minister Sheikh Hasina during her October 2019 visit had urged India to inform them in advance about such measures.

“The latest abrupt announcement of the Government of India on 14 September 2020 undermines the discussions that took place in 2019 and 2020 between the two friendly countries on the matter and the understanding shared,” the foreign ministry said.

It asked the high commission to convey the message to the relevant authorities in India and take measures to resume the export of onions to Bangladesh, “taking into consideration the excellent ties of friendship and understanding enjoyed by the two countries”.