Onion glut in Khatunganj: Prices plummet amid overflowing warehouses

It’s peak onion season in Bangladesh, and the warehouses of Chittagong—particularly in bustling hubs like Khatunganj, Chaktai, and Pahartali—are brimming with onions. With limited storage space, wholesalers are resorting to unconventional measures, such as selling onions directly on sidewalks or even from trucks. Despite the surplus, prices remain significantly lower than last year, yet sales are sluggish.

According to the Department of Agricultural Extension, Bangladesh produced 3.79 million tonnes of onions during the 2023-24 fiscal year. For the current fiscal year (2024-25), the ministry aims to produce 3.821 million tonnes indicating a steady increase in output. However, official estimates suggest that production exceeds demand by 400,000 to 600,000 tonnes, necessitating imports of 700,000 to 800,000 tonnes annually, primarily sourced from India due to proximity and ease of access through land ports.

Market dynamics and falling prices

A visit to the wholesale markets over the weekend revealed warehouses overflowing with onions. Traders reported that both local and imported varieties are abundant, driving down prices. 

Local onions are currently retailing at Tk 40-50 per kg in Chattogram markets, compared to Tk 100-120 per kg last February.

Imported onions are selling at Tk 60-70 per kg contrasting sharply with last year’s rates of Tk 100-120 per kg.

Despite the glut, buyers remain scarce. "Even six months ago, onions were priced at Tk 80-100 per kg, but now, despite the low prices, there’s little interest," said Md Aziz Ullah, a shopkeeper at Pahartali Bazar. Garlic and potato prices have similarly dropped, reflecting broader trends in agricultural commodities.

Haji Abul Bashar, owner of M/s Bashar & Sons in Madhya Chaktai, echoed this sentiment: "Indian onions coexist with domestic ones in the market, but the abundance of local produce has drastically reduced prices. Domestic onions sell for Tk 35-40 per kg, depending on quality." He assured consumers that there is no risk of price hikes ahead of Ramadan, saying, "With sufficient stock available, we won’t face an onion crisis during the holy month."

Abu Tayyab, a trader at Hamidullah Mia Bazar in Khatunganj, noted that Meherpuri variety onions, brought straight from fields, are being sold at rock-bottom prices of Tk 25-30 per kg wholesale. Meanwhile, premium local onions from regions like Pabna, Kushtia, and Rajbari fetch slightly higher rates of Tk 35-38 per kg. Yet, demand remains lacklustre, leaving traders struggling to move their inventory.

Wastage concerns

Dr Shailendra Nath Majumdar, a recently retired senior scientific officer from the Bangladesh Agricultural Research Institute, highlighted the issue of wastage. "Around 30-35 per cent of the country’s onion production goes to waste due to improper handling and insufficient storage facilities," he explained. 

Storing onions in cold storages costs Tk 20 per kg in electricity alone, making it economically unviable for many farmers. D. Majumdar added, "Onions fare better stored in farmers' homes rather than cold storages, where they often rot."

He elaborated, "Bangladesh requires approximately 3 million tonnes of onions annually, but spoilage creates a shortfall of 4,00,000 to 6,00,000 tonnes, forcing reliance on imports. Unfortunately, imported onions also contribute to wastage. If fair pricing mechanisms could be established at the farmer level year-round, production would rise, benefiting producers and consumers alike."

Retailers’ outlook

Md Idris, General Secretary of Lamar Bazar Traders’ Association in Khatunganj, expressed optimism about future sales. "While today’s oversupply suppresses prices, demand typically spikes during Ramadan," he observed. "We expect sales to pick up as the festival approaches, though fluctuations may occur."

Ali Hossain Khokon of SN Traders in Chaktai concurred, noting, "The market is saturated, but Ramadan will likely boost consumption. Even if prices fluctuate slightly, there won’t be an onion crisis this year."