Indian ban on onion exports hits Bangladesh hard

From Dhaka:

Rarely has a Prime Minister of a visiting country before raised the issue of a vegetable that affects the common man. The Prime Minister of Bangladesh, Sheikh Hasina, raised the matter in good humour when she, in a friendly complaining tone, urged the Indian government to inform Bangladesh before slapping any ban on exports of essential items like the bulb. Onion prices in Bangladesh have touched the Rs 100 per kilo mark.

Various consumer organisations in Bangladesh are urging the Prime Minister to take up the issue with the Indian Prime Minister to provide relief to the people.

“Onion is a key ingredient in our food and the high prices mean it can’t be used on a daily basis. Food without onion does not taste the same. But onions are selling at the same price as that of imported apples,” said Swastika Sharif, a teacher.

India, on September 29, banned export of onions with immediate effect because of a shortage in supply in the domestic market. The price of onions in India has shot up to Rs 80 as floods ravaged extensive parts of the country.

However, there is news that 1500 tonnes of onions loaded in 60 trucks, under LCs opened before the ban came into effect, have started entering Bangladesh on Friday. The Bangladesh government has made special arrangements at the border posts in Hili and Beniapole in West Bengal to clear the consignments to enable the onions to reach the vegetable markets as fast as possible. This is likely to reduce the prices of onions here.

On September 13, the minimum export price of US$ 850 per metric tonne was imposed on onion exports from India. "Though there was some reduction in export of onions thereafter, yet the flow was still continuing," said an official.

The impact of onion shortage in the country can be gauged by the fact that the Bangladesh Central Bank instructed all banks to fix interest rates for financing onion imports at nine per cent instead of the existing 12 to 14 per cent with a view to contain the price hike of onions.

Though the Bangladeshi government is vigilant and has sent teams to various districts to ensure that wholesalers do not exploit the situation, hoarders are nonetheless making huge profits because of the current crisis. The wholesalers have allegedly brought supply of onions to the markets down though they have enough stocks in their godowns. Consumers have been demanding in various districts that the district administrations should use their power to ensure that stocks were not hoarded and that onions are sold at a fair price.

The Bangladesh Central Bank has instructed that the new interest rates will continue till December 31. It is hopeful this will help reduce import cost. Before September 29, onions were selling for between Rs 30 and Rs 40 a kg However, now the prices of onion have shot up to Rs 100.

But, importers of onions from India are not sure whether onion exporters from India will be able to supply the required quantity of onions looking at the shortage of onions in the Indian domestic market itself. They are looking for supplies from Myanmar and China. The managing director of Dhaka Bank, Syed Mahbubur Rahman, who is also the chairman of the Association of Bangladesh Bankers, hoped that the price will cool down in the local market.

The Hindu community in Bangladesh that is celebrating Durga Puja is upset about the high cost of onions during the festive season. According to Debashis Mukherjee, the Indian government should have exempted Bangladesh from this ban as the two countries enjoy a friendly relationship and have similar eating habits.

“With the high prices of onions, the celebrations will not be the same,” said Mukherjee.