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Onion import : IFPRI for reducing dependence on India

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International Food Policy Research Institute (IFPRI) has suggested reducing dependence on India and facing   climate-induced losses by importing onions from alternative sources like China, Egypt, Malaysia, Myanmar,     Pakistan, Turkey and Vietnam to keep the price of the item stable in Bangladesh.

As short-term measures, they also suggested careful assessment of the impacts of onion imports to avoid fall    in prices so that it does not act as a disincentive for Bangladeshi farmers to produce onion. They also      proposed to be vigilant against speculative storage between September and December when Bangladesh is    most dependent on onion imports, to ensure the supply of high-quality inputs — particularly seeds, fertilisers, and pesticides — to farmers timely to increase domestic production of onion and reduce the country’s overall dependence on imports.

The Institute has made the suggestions in a research publication titled “Sudden Onion Price Surge in Bangladesh: A Situation Analysis for Bangladesh”. USAID Mission in Bangladesh and the IFPRI-PRSSP team undertook the situation analysis of the onion price surge with a view to making policy recommendations for onion price stabilisation in the country.

The report said the onion is a key ingredient in most Bangladeshi meals, so its sudden price spurt in the domestic market since early July 2013 has raised concerns among the population and the government. While the price surge hits low-income consumers the hardest, it can also become an important political issue.

Demand of onion is expected to increase by 51 per cent this decade — from 1.23 million metric tonnes in 2010 to 1.86 million metric tonnes in 2020 — under the business-as-usual scenario. Under an optimistic income growth scenario, it’s expected to increase by 69 per cent to 2.08 million metric tonnes, the report added.

In 2011-2012 imported onions constituted about one-fourth of the estimated 1.3 million metric tonnes of ‘total onion availability’ (the sum of net domestic production and imports), they accounted for nearly 60 per cent of the average total onion stocks at wholesale markets in Dhaka city, the main consumption centre of the country, during the price-surge period of July 22-August 22, 2013. These patterns indicate that the Indian onion plays a key role in determining the market price of onions in Bangladesh.

As medium-term policy recommendations the report suggested devising ways to establish an enabling environment that promotes more participation in the onion trade and guards against excessive stockpiling to increase competition in the supply market and erode the scope for seeking windfall profits through speculation; take measures to reconcile with the major discrepancies between data reported by the Bangladesh Bureau of Statistics (BBS) and data reported by the Department of Agricultural Extension (DAE).

As long-term policy recommendations, IFPRI suggested reducing dependence on onion imports by taking steps to increase domestic production. Since Bangladesh has very little fallow arable land available, future production increases will have to come from higher yields rather than increased cultivation area.

The report noted that onion cultivation is quite profitable in Bangladesh. In 2012, on a cash-cost basis, onion had a profitability rate of 91 per cent of the average cost per tonne of onion produced. That rate decreases but still remains profitable at 37 per cent of the production cost per tonne when the estimated values of land rent and family labour are taken into consideration in cost calculations.

The crop is a highly commercial commodity, and onion farmers sold an estimated 86 per cent of their gross onion production, according to data received from the 2011-2012 IFPRI-PRSSP Bangladesh Integrated Household Survey.

Despite the domestic profitability of onion and production growth at an annual rate of 7.3 per cent between 2004/05 and 2011/12, imports from India dominate the market in Bangladesh.

 

 

 

– Published : Wednesday, 18 September 2013: byKamrun Nahar

Source: http://www.thefinancialexpress-bd.com/index.php?ref=MjBfMDlfMThfMTNfMV8yXzE4Mzg1NA==

 

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