Some 27,000 tonnes of onion worth Tk 102 crore have apparently been abandoned at the Chattogram port by importers, as their market price expectations were decimated by an influx of the Indian variety and local harvests.
September last year saw a mad rush for importing the kitchen staple after prices took off to reach a record high of Tk 250 per kilogramme (kg) in 2019, fuelled by India’s export ban and weak local supplies.
Importers secured government approval to bring in 217,000 tonnes. Since then they imported 147,000 tonnes. Of it, about 120,000 tonnes went through the Chattogram port as of Thursday, as prices stayed afloat to as much as Tk 100 per kg.
But after India lifted the ban on exports on the first day of January and the local variety started to be harvested, the onions that were imported from other countries lost their appeal.
If the importers attempt to receive their goods, they might have to pay charges for storage facilities of refrigerated containers and demurrage charges for delays in getting the items released
Then the overall cost would reach about Tk 50 per kg. But the imports will not sell for more than Tk 15 a kg as they are of inferior quality compared to those from India and the local sources.
Several importers say perishable items such as onion have a short shelf life once they are thawed on being taken out of freezer containers. So traders come to receive the goods from the port after having sold them in advance to reduce chances of it rotting. There is a shortage of space at warehouses as well.
Had Indian onions not arrived, importers could have made a profit even after paying the demurrage charges. Now, it is not possible as the price has dropped, importers say.
According to the Chattogram port sources, 27,000 tonnes of onions were imported from nine countries, including the Netherlands, Turkey, Thailand and Egypt, and those had been lying on the yards as of Thursday.
On average, 2,500 tonnes of onions were being delivered from the port every day before the Indian onions hit the market. Now, it has gone down to 500 tonnes.
Customs laws state that importers have to take the delivery of goods within 30 days after their arrival at the port. If they fail, the authorities will start the procedures to auction the goods.
Around 1,100 tonnes of onion have been put up for auction. The onions were not delivered to importers for various reasons, said Faisal Bin Rahman, deputy commissioner for auction.
This is the single largest auction of onions, he said. Another 900 tonnes of onions are being examined, and they will be auctioned soon, he said.
Omar Farooq imported 72 tonnes of onions from the Netherlands in the middle of November. Although two months have passed, the importer has not taken the delivery.
“The demand for onions from other countries has declined as India has given the opportunity to export onions. Due to the convenience of the refrigerated container at the port, we take the delivery after the advance sale,” he said.
“However, due to the sudden fall in prices and the re-imposition of 5 per cent tariffs, the loss will increase if we take the delivery of these onions,” he added.
On January 7, the National Board of Revenue re-imposed the 5 per cent customs duty on the import of the essential cooking ingredient. The duty was withdrawn in September to allow the importers to buy onions from international sources to boost supplies.
Mintu Sawdagar, a wholesaler of Chattogram’s Khatunganj market and owner of Muhammadiya Traders, said the price of all onions, including the domestic ones, came down by Tk 20 per kg because of the imports from India.
No one is interested in buying the onions that came from other countries. There is demand only for local and Indian onions as the quality of the former is not good, he said.
Local and Indian onions can be sold on a daily basis, whereas it takes up to a week to clear the varieties from other countries. Wholesalers are not storing the varieties from other countries because of the shortage of space in warehouses in Khatunganj.
Indian onions are being sold at Tk 40-42 per kg in the wholesale market, local onions at Tk 28-30, Egyptian onions at Tk 30-34, and Dutch onions at Tk 20-30 per kg in the kitchen market on Saturday, said Sawdagar.
Before the arrival of Indian onions, the onions from other countries were sold at Tk 40-45 per kg in the wholesale market, he added.
Source : The Daily Star
