Indian duty rise makes BD onion, rice, sugar  market turbulent again

The price of onion is now soaring in the commodity market along with other products. On Thursday, onions were sold up to Tk 80 per kilogram in Dhaka market. Wholesale traders said they sold onions at the maximum price of Tk 65 per kg.

Meanwhile, prices of Indian onion have increased by Tk 15 per kg at Bhomra Land Port in Satkhira following the hefty 40 per cent export duty imposed by India.

Importers said prices will increase further. Meanwhile, the price of onion has been volatile in the open market.

"India does not want to export onions. Therefore, instead of direct bans, tariffs are imposed to discourage traders. This will destabilise the onion market not only in Bhomra Port but in the entire country. The price will go up a lot," Bhomra C&F Association President Kazi Naushad Dilwar Raju said.

While visiting different kitchen markets in the capital this correspondent found that the price of onion is increasing in the country's market due to the news of imposition of duty on Indian onion exports. At the retail level, domestic onion is being sold at Tk 80 to Tk 95 per kg. And Indian onions are being sold at Tk 70 to Tk 80.

Buyers are in a state of shock due to the upward price of onion. They claim that the sellers are increasing the prices on the pretext of imposing tariffs on Indian onion exports.

And the sellers claim that there is not enough stock in the market. Besides, India has imposed duty on onion exports, which is affecting the country's market.

Lokman, the seller of Aganagar market in Keraniganj said, "Onion prices are higher at the wholesale level due to India imposing duty on onion exports. Apart from this there are transport and labour costs. It also increases the price in the retail market."

The wholesale market price of onion as observed by visiting Shyambazar in Old Dhaka is that  5 kg of local onion is being sold at Tk 380 to Tk 400. And every five kg of Indian onion is being sold at Tk 300.

According to sources, onion is the most discussed in the volatile consumer goods market. The Indian government has imposed a 40 per cent duty on onion exports, increasing prices in the country's market.

 In this situation, there is a fear that the onion market will become more unstable due to the country's new decision.

Similarly, India has decided to increase the duty on rice and sugar. The country has imposed a 20 per cent duty on the export of parboiled rice on the pretext of maintaining internal reserves and controlling prices.

Meanwhile, after India, another neighbouring state of Bangladesh, Myanmar, is also going to ban the export of rice. Concerned people fear that India's decision to impose additional duties on some important products including onion, rice and sugar or discourage export may make the international market of these products and the market of Bangladesh more unstable as a result.

Dr AB Mirza Azizul Islam, the former caretaker government's Finance Adviser, said that inflation is one of the problems in the country's economy. Now it is close to 10 per cent. Depreciation of the taka against the dollar is fuelling inflation. In this, there is a risk that the prices of these products will increase in the market due to the decision of countries like India and Myanmar.

Dr Zahid Hossain, the former Chief Economist of the World Bank in Dhaka, feels that India is destabilizing the international market while keeping the domestic market stable ahead of their elections, which may have an impact on Bangladesh as well.

He said, taking India's decision as an excuse, those syndicate traders who control the trade of these products in Bangladesh will take advantage. Also, if the price of these products increases in the international market, many countries including Bangladesh will suffer.

Sources said that Indian onion exporters have informed importers of Hilli Land Port of Dinajpur about the new tariff on mobile phones. The new tariff price will be effective from Saturday. So far onion LC was opened at US$ 150/200. Onion was imported by paying 40 per cent duty on that price. But India has issued new guidelines in this regard. That is - at whatever price LC is done, the duty is payable at the customs value of $325 per tonne of onion to the Indian Customs. The Agricultural Commodity Pricing Authority of India has fixed this new tariff price. As a result of this, the current tax of Tk 5 to Tk 7 per kg of onion has to be paid up to Tk 11.

Onion importer Haji Md Baset said, onion price has not increased in the last one week in Shyambazar. If India increases the tariff, there will be no impact on the country. Rather, if the import is stopped, it will be in danger.

He said that only 20 per cent of onions can be stocked in the country's market. Therefore, to meet the demand of onions in the country, we have to rely on imports.

New duty on rice export: Government of India has imposed a 20 per cent duty on the export of parboiled rice in order to maintain domestic stocks and control prices. The export duty was imposed on August 25, which will remain in effect until October 16, the Finance Ministry of India said in a notification.

According to sources, parboiled rice for export which is already at an Indian port for customs clearance and valid letter of credit for export was opened before August 25 out of the scope of the newly imposed duty. India has imposed restrictions on the export of all types of non-residential rice through this ban. Earlier on July 21, the country had banned the export of white rice. The ban was aimed at boosting domestic supply and controlling retail prices of rice during the upcoming festive season. It should be noted that about 25 per cent of the rice exported from India is non-basmati white rice. Earlier, in September last year, India had banned the export of rice.

In addition, the news agency Reuters says that the country is going to ban the export of sugar, although the official announcement has not yet come. However, major onion, rice and sugar traders say the impact of the Indian decision will not be immediate on the Bangladeshi market. Because Bangladesh still has enough stock of these products.