Supply crunch raises ginger, onion prices

Ginger and onion produced in the country meet a significant portion of the local demand, but still there is an import dependency for these products, which led to an instability in the market for which the consumers have been suffering.

Wholesalers and retailers in Dhaka said currently ginger, mainly imported from Myanmar, sells at Tk350 per kg in the retail market. Since gingers produced in Bangladesh and Myanmar are almost similar in appearance, there is not much difference in their prices.

According to the Trading Corporation of Bangladesh's market analysis, the price of ginger has increased by almost 80% in the last one month.

As the reason for this, the traders said the prices of imported essential products are already 25%-30% higher due to the dollar exchange rate. The situation worsened recently, because for over a month Bangladeshi traders have not been importing ginger from China – their main sourcing destination – as China itself is importing ginger now.

Traders said the price of ginger imported from China would reach Tk370 per kg at retail level. Importing ginger from Myanmar is cheaper and less time consuming, so they have been bringing it from there. But the volume of onion imports even from there was low during the month of Ramadan, which created a shortage, and businessmen took that opportunity to hike its price.

Haji Md Majed, an importer of Shyambazar, Dhaka, told TBS, "Ginger from China costs Tk370 per kg, which is difficult to sell in the country. That is why ginger is being imported from Myanmar, but due to the dollar crisis, it cannot be imported as per demand. Apart from this, a small amount of ginger is coming from India and Vietnam."  

Importers said currently ginger sells at Tk220-240 per kg at wholesale level in Shyambazar.

Chandan Kumar Poddar, owner of CRG Trading in Khatunganj wholesale market in Chattogram, told TBS that usually local and Chinese ginger dominates the local market during most part of the year, but currently they are not available. There is a small quantity of Myanmar and Vietnamese ginger which is very inadequate to meet the local demand.

"Ginger prices are volatile in the market mainly due to supply shortage. Currently, Myanmar ginger sells at Tk240-245, and Vietnamese ginger at Tk250-260 per kg," he said.

Junayedul Haque, an importer in Chattogram, told TBS that the import cost of ginger was too high. So, many traders refrained from importing it, thinking that they would not be able to make profit by selling it at the local market. This led to a supply shortage which resulted in a price hike.

A 2021 report by the commerce ministry said the country has an annual demand of 3.5-4 lakh tonnes of ginger. According to the Department of Agricultural Extension, 2.5 lakh tonnes of ginger was produced locally in FY21. The rest of the demand was met by importing it.

There is a similar import dependency for onions too. The demand for onion is 26-28 lakh tonnes in the country which produces around 36 lakh tonnes, but 35%-40% is lost due to weakness in the storage system, known as post-harvest loss.

The volume of onion import is small, but still it acts as a vital factor in maintaining the market stability, said traders.

The Ministry of Agriculture said the onion production in the country has been good this year, and at the same time preparations are being made for the summer onion cultivation. That is why the government stopped importing it during the production season.

The price of onion was Tk33-35 per kg in the local market before Eid-ul-Fitr, but currently it has reached Tk80.

According to TCB, even considering the onion price Tk70 per kg means it has increased by 53% in one month.

That means the current price of onion is more than double compared to what it was before Eid-ul-Fitr.

People involved in the sector said the importers have created a crisis in the market, due to which the price of onion has gradually increased. Consequently, the government is forced to allow its import.

According to sources in the agriculture ministry, when the price of onion was Tk50-60 per kg, the government thought the farmers were getting a good price, because its production cost was around Tk30. So the authorities did not allow its import.

But after the onion price rose to Tk80 per kg recently, the government is showing interest in allowing its imports. Agriculture Minister Dr Muhammad Abdur Razzaque told reporters a week ago that a decision in this regard will be taken after observing the market for a few more days.

However, the importers said they have not yet received the permission to import onion yet.