Onion Trade between India and Bangladesh - Trends 2021

Published 2021년 6월 7일

Since the beginning of 2021, the country has imported onions from India to overcome the shortage of onions and balance the prices in the market. As domestic onion prices spiked up sharply in Bangladesh in January 2021, the onion imports from India increased drastically to fill the supply gap. The impact of inflation on domestically produced onion prices was more significant than the price of onions imported from India.

Bangladesh is among the top ten onion importers globally, with a 4.41% share in global onion imports during 2020, and onion imports witnessed a year-on-year growth of 144.63% despite a stable domestic production. The country meets its domestic demand for onions through imports from India, Egypt, Turkey, Myanmar, China, and Pakistan. In 2020, India had a share of 60.1% in Bangladesh’s onion import value, followed by Pakistan (11.2%), the Netherlands (8.8%), Myanmar (8.2%), and Egypt (6.6%). Since last year, Bangladesh’s onion imports from India have increased dramatically due to the domestic food price inflation, which caused the price of domestically produced onions to skyrocket.

Source of Onion Imports in 2020 - Bangladesh

Source: Tridge.

Situation in January 2021

India had banned onion exports in September 2020 to protect its domestic market from supply shortages and skyrocketing prices. As soon as the ban was lifted on 1st January 202, a large volume of Indian onions entered the domestic markets of Bangladesh. On January 11th, 2021, the price of onions in the domestic market of Bangladesh was USD 0.38 per kg, while the imported onions from India were priced at USD 0.28 per kg. The country started importing more onions to reduce the prices of domestic onions, and within 20 days, the prices of onions in Bangladesh fell to USD 0.30 per kg on 1st February 2021.

Source: Tridge. Price Charts.

Situation since March 2021

Onion prices again picked up pace in March 2021, and by the end of the first week, the onions were priced at USD 0.44 per kg, 36% more than the price of Indian onions. During this phase, the supply of imported onions fell, pushing up the prices in the domestic markets. The seasonal harvest of Murikata onion in Bangladesh also fell down creating a shortage in the market. The traders and sellers remained hopeful and expected that the prices would fall in the coming week with the new harvest and increased imports. The prices fell to USD 0.37 per kg by 20th April 2021 but again started picking up pace as May came closer.

Situation in June 2021

By the end of May, onion prices peaked at USD 0.53 per kg, an all-time high of 2021. The government has now decided to ease the onion import and increase the domestic supply to balance the soaring prices. The government imposed unofficial restrictions on issuing 'import permits'(IP) which limited the import of onions, therefore, pushed up the prices. Despite a good harvest, the onion prices climbed up as the overall supply was constrained due to restricted imports.

The government of Bangladesh is currently working on stabilizing the market for essential food products like onions. Also,as the government has eased out imports of onion from India, it is expected that the price of imported onions will be below USD 0.30 per kg. It is anticipated that the onion production will be around 2.9 million tonnes, and the country would import additional at least 0.1 million tonnes in the coming months to meet the domestic demand.