Completely eliminate import duty on onions: BTTC

Amid rising onion prices, the Bangladesh Trade and Tariff Commission (BTTC) has recommended the government to allow import of the kitchen staple at zero duty to reduce import costs and stabilize domestic prices.

Bulb prices rose to 150 Turkish crowns per kilo earlier this week as supplies of local onions dwindled ahead of the start of the new growing season.

The BTTC said the period from October 15 to January 15 is usually the lean season for locally grown onions. Early varieties usually begin to hit the market at this time.

“However, heavy rains this year have had a negative impact on the cultivation of early varieties. This can be seen as a reason for the decline in supply of domestic crops and price hikes,” BTTC said in a report submitted to the Ministry of Commerce and the National Trade and Commerce Administration. Tax Board (NBR).

Prices of locally produced onions in Dhaka have risen 14 percent to 130-150 Turkish lira per kilogram in the past week, according to retail trade data compiled by the Trading Corporation of Bangladesh (TCB).

According to TCB, imported onions also rose in price by almost 8 percent, reaching 85-120 Turkish lira per kilogram.

BTTC said India, a major supplier of bulbs to Bangladesh, recently imposed a 20 percent export duty to curb exports due to domestic shortages. This has further increased import costs and impacted local onion prices.

The BTTC said the NBR lifted the regulatory duty on onion imports on September 5, maintaining only 5 percent import duty until November 30.

“It would now be prudent to completely waive the duty for a certain period to reduce the cost of onion imports and increase supply to the domestic market,” it said.

“It appears that the price hike can be controlled if imports are encouraged,” BTTC said.

Bangladesh produces about 2.6 million tons of onions annually, which can meet up to 80 percent of domestic demand.