Buyers are relieved as onion prices start to fall

Buyers are relieved as onion prices start to fall

The recent dynamics of onion prices in Dhaka markets have witnessed a significant shift, with prices dipping by Tk 30 or more per kilogram, attributed to an influx of the Hali variety and increased supply. This report delves into the factors contributing to the decline in onion prices, the impact on consumers and traders, and the implications for the market moving forward.

Price Fluctuations and Market Dynamics

The retail prices of onions in Dhaka have experienced a notable decrease, with reports indicating a drop of Tk 30 per kilogram. The market trend, which had been on an upward trajectory prior to Ramadan, prompted authorities to intervene through special initiatives, including imports of Indian varieties, to stabilize prices.

Conversations with traders at prominent kitchen markets such as Malibagh, Moghbazar, Karwan Bazar, and Shyambazar reveal an abundance of supply, particularly of the Hali variety, contributing to the price reduction. Wholesale prices have fallen to Tk 45-55 per kilogram, subsequently lowering retail prices to Tk 60-70 per kilogram. Notably, bargaining may lead to further price reductions, with bulk purchases from wholesale markets like Karwan Bazar offering onions at Tk 55 per kilogram.

Factors Driving the Price Decrease

The increased availability of the Hali variety, coupled with timely harvesting, has bolstered supply levels, thus exerting downward pressure on prices. The Hali variety, predominantly produced in Bangladesh and typically hitting the market in March, has played a pivotal role in mitigating price escalations.

Narayan Saha, an onion trader and importer at Shyambazar, emphasizes the positive impact of the Hali variety on prices, negating the necessity for further imports and safeguarding local farmers' interests. However, reports suggest that a section of traders had engaged in hoarding practices in anticipation of Ramadan, contributing to artificial price inflation. Subsequent release of hoarded stocks, alongside the introduction of the Hali variety, has amplified market supply, leading to the current price slump.

The current scenario in Dhaka's onion market underscores the significance of supply dynamics in influencing price fluctuations. The influx of the Hali variety and increased market supply have substantially alleviated price pressures, providing relief to consumers and enhancing market stability. Moving forward, vigilance against hoarding practices and continued support for local farmers remain imperative to sustainably manage onion prices and ensure market equilibrium.