Why Onion Prices Spike in December: Market Insights

Onion prices have surged suddenly. In the capital, one kilogram now costs over 150 Taka. Within a week, prices have risen by 20-30 Taka per kilogram.

New early-harvest onions have yet to reach the market, and import approvals have not been granted. Shopkeepers told the media that these factors are behind the price increase.

Today, Saturday, visits to Karwan Bazar, Mohammadpur Town Hall, Krishi Market, and Uttara Hajj Camp confirmed the higher prices. At Karwan Bazar, high-quality old onions from Pabna sell at 750 Taka per mound. Retail prices are 160 Taka per kilogram, though onions are available at 140 Taka as well.

A few shops at Karwan Bazar have early-harvest onions, priced at 120-130 Taka per kilogram.

Nirab Mia, an onion seller at Karwan Bazar, told the media that new onions would enter the market after the second week of December. Prices are then expected to drop to 70-80 Taka per kilogram. He added that prices rise during this period every year. As India has not exported onions this year, the market sees higher prices.

In Mohammadpur Town Hall, Krishi Market, and Uttara Hajj Camp, onions are sold at 150-160 Taka per kilogram. Sellers reported that their wholesale cost is 140-148 Taka per kilogram.

Pabna Market Situation
Boalmari Market in Santhia Upazila, Pabna, one of the largest onion wholesale centres, saw a sudden price jump due to supply shortages on Thursday and Friday. Raja Hossain, a market wholesaler, said that on Friday, a mound sold for 4,500-4,600 Taka (112-115 Taka per kilogram), compared to 3,400-3,500 Taka on Wednesday.

Raja Hossain explained that supply dropped sharply on Friday, causing retail and wholesale prices to rise. With supply improving on Saturday, prices fell again to 3,500 Taka per mound.

Early-harvest onions are expected in 10-15 days. Observing high prices, farmers sold their stored undernourished onions at 120-130 Taka per kilogram, increasing supply and helping reduce old onion prices.

Reasons for November-December Price Hike
The Tariff Commission notes four main factors for price spikes each year during November and December: dominance of middlemen, insufficient storage, end of the season, and rainfall-related losses.

Storage Shortage
The onion storage season is January to April. Without government storage, farmers store onions themselves. This lack of storage is identified as a key reason for price increases.

Season End
November and December mark the end of the onion season, leaving lower stocks with farmers. Scarcity causes prices to rise.

Middlemen Profits
Onions pass through multiple hands from farm to market, with each middleman adding profit. This contributes to seasonal price hikes.

Rainfall Damage
Regions like Pabna, Faridpur, Rajbari, and Meherpur experienced heavy rainfall last month, spoiling significant amounts of early-harvest onions, further pushing up market prices.

Khaborwala/SS