EDEN BUILDING TO STOCK EXCHANGE

Published: 12:11 AM, 20 October 2019

https://dailyasianage.com/news/201320/syndicate-syndrome-and-bangladesh-onion-market

Syndicate syndrome and Bangladesh onion market

M S Siddiqui

The Fresh Plaza, a team comprises of a growing team of writers, editors, and account managers based in The Netherlands for our commercial representation in a global market review published few days back mentioned that as a result of the dry, hot summer in Europe, the harvest in the north of the continent is much smaller. In the US, the rain in the late summer had a similar effect on the harvest figures. Onion prices are on the rise worldwide and new trade relations are emerging. In the third week of 2019, due to the limited harvest as a result of the dry weather, the available stocks are considerably smaller; the total volume shipped exceeded 600,000 tons, so more than 20,000 tons had been exported per week at high prices. Due to the high price of Dutch onions and the lower yield in Europe (1.2 million tons lower), Chinese onions hurriedly imported and currently on the European market. New Zealand, Chilean, Argentinean, European importers also expecting South African and Egyptian onions will also reach the European market to compensate for the shortages. Currently, the demand from overseas destinations is shifting to Europe. For example, China is exporting to Europe and this is a new trade flow. Other countries, such as Kyrgyzstan, are trying to get a slice of this demanding market. In Asia, India exported 2.2 million tonnes of fresh onions in the 2018/19 fiscal year ended March 31, according to data from India's Agricultural and Processed Food Products Export Development Authority. That's more than half of all imports by Asian countries, traders estimate. Asian consumers have developed a serious dependence on Indian onion supplies. The agriculture market experts predicted that the summer crop in India is likely to bring higher prices this year due to the drought situation prevailing in the state which will hamper production.

This might get the farmers a higher price. An Indian newspaper report on Fri, 29 Mar 2019 that fluctuating market dynamics and bumper produce have reportedly resulted in a Rs 42 billion (€540 mln) drop in earnings of onion farmers as compared to last year, India's central Agricultural Ministry has stated. In January, 2019, about 1.3 million tons of onions were sold through agriculture market produce committees at a price of Rs 13,760 (€177) per ton. In December, 1.11 million tons of onions fetched Rs 13,310 (€171) per ton. And this price is nearly 61% less than the prices gotten last year, says the report. In Maharashtra, which accounts for nearly one-third of the Indian onion production, prices fell even more sharply. One of the major reasons behind the massive drop is that the production is expected to be higher by 12.48% compared to the last five years' average. As against the approximate 21 million ton, farmers are expecting around 23.6 million tons this year. The production became true and the onion price has more than doubled in August, after moving in a narrow range of Rs 9-Rs 13 a kg in the previous three months, and further below between Rs 4 and Rs 9 a kg since February. The Directorate General of Foreign Trade (DGFT), in a notification on 13th September, had announced a minimum export price (MEP) for onion at $850 a ton. By levying a minimum export price (MEP) and allowing import, the government is promoting foreign farmers," said chairman of the Agricultural Produce Market Committee. In Indian market, onion was quoted 25 per cent higher on September 13, Friday 2019 at Delhi's Azadpur Mandi, a major market of the Agriculture Produce Marketing Committee (APMC). Several other markets in the country too witnessed a steep rise in onion prices on Friday amid reports of crop damage and delay in arrivals of new crop from Maharashtra, Karnataka and other southern states due to heavy rains recently. India has imposed the export ban and suppliers and distributors are blocked from stocking up. Some reserve onion stocks held by the national government are also being sold in several states at subsidized prices. The government has removed incentives for export of fresh and chilled onions in June 11, 2019, a move aimed at discouraging outbound shipments of the kitchen staple due to rising prices in the domestic market. Exporters of onion were earlier availing incentives under Merchandise Exports from India Scheme (MEIS) at the rate of 10 per cent. In early July, onion prices at retail level in Bangladesh have doubled in the space of just 10 days, following India's withdrawal of incentives on onion exports for its farmers. But the shipments from elsewhere - Iran and Turkey are also potential suppliers - that authorities in countries except Bangladesh across the region are investigating will all take time. It takes one month when it comes from Egypt and about 25 days from China, while it takes only a few days from India. Sri Lanka have already placed orders with Egypt and China, said the President of the Essential Food Commodities, Importers and Traders Association. Even India has started importing onions from Egypt in an effort to calm prices. And there won't be any meaningful drop in prices before summer-sown crops start to hit the market, said Ajit Shah, president of the Mumbai-based Onion Exporters' Association. Bangladesh authority did not take in to consideration of the global market prediction but India has withdrawn incentive on export of onion. Media and consumers though smelt a local conspiracy amid old suspicions of 'syndicates' - powerful networks with presence throughout a supply chain,

who work to manipulate the market. Citing that dishonest traders and importers are in cahoots raising the onion price, customers here urged the authority to monitor local markets. In Benapole land port, the import of Indian onions reduced three-fold in June. According to a report in local daily on July 16, 2019, one Inspector of the land port said in last 10 days of the previous month, 1770 tonnes of onions were imported through Benapole land port. But in first nine days of the running month, only 459 tonnes of onions came through. The state-run Trading Corporation of Bangladesh (TCB) is also selling onions at a discounted 45 taka per kilogram in the capital Dhaka through 35 trucks in Dhaka City. It is total failed organization to meet the market challenge. Finally, Bangladesh have turned to the likes of Myanmar, Egypt, Turkey and China to increase supplies in a bid bring prices down, government officials and traders said. But the hefty volumes lost will be hard to replace. All the countries in the world noted the global situation and took initiative to find alternate source of onion from early this year but Bangladesh authorities and business persons failed to take note of production and market forecast and consumers are worse sufferer of the short sightless of all stakeholders. Media investigated and find syndication behind the crisis. Bangladesh media is full of Indian news but there is no useful news, which may have impact on Bangladesh. The writer is a legal economist Email: mssiddiqui2035@gmail.com