ONION DEPRESSION-BANGLADESH Bolpur
A key cooking ingredient for poor & rich.
BA(HONS) in Economics and politics.
Visva Bharati University.
My study on onion price hike showed me an inaccurate estimate of supply and demand in Bangladesh onion market which created the Fluctuations. But, is it that easy to elaborate? Estimation of demand and production of onion wrong, the government agencies fail to understand the gravity of the problem had forced the price of this key cooking ingredient up to a record high and hurt consumers. Prices of onion hit highest of all time around Tk 250 - 300 a kg in the final days of last year. Now it seems that there is a problem in „estimates‟ or „perception‟ in the market. If the government statistics in my case study were correct, such a crisis would not have happened. So, either supply of production is over-estimated or demand is underestimated in this case.
The estimate – Government data
It says that the annual domestic demand for onions 24 lakh tonnes and 23.76 lakh tonnes were produced in fiscal 2018-19. and, 30 per cent of the produce gets wasted naturally. Based on the (GOVT) data, there was adequate stock But, this production estimate maintained by the ministry is 25% higher than the estimate of BBS the Bangladesh Bureau of Statistics, the national statistical agency. The BBS estimated that onion production was 18.03 lakh tonnes in the last fiscal year.
With that, If the annual onion import, which is nearly 10 lakh tonnes, is considered, then the discrepancy in estimate becomes very much clear. C A B said annual demand for onion would be around 30 lakh(TN).
Let’s think another way, Consumers are now getting more rational and health conscious so that they are eating more vegetable and less rice. To do so, Demand for onion is rising as people are consuming more and more vegetables by eating less rice. so the market demand is changing. That‟s why the government should revise the estimates of demand and supply of essential commodities.
“The government‟s estimate on the annual domestic demand for onion might be underestimated. The annual demand for the item might be 30-33 lakh tonnes.
It seems that they did not pay adequate attention deriving estimate of demand. They could not understand the gravity of the situation. There might be some sort of complacence among officials and they did not take the issue seriously,” Said Economist Zahid Hussain. Also fueled by the export ban slapped by India. On September 2019, India set the minimum export price to curb its shipments and help bring down soaring prices in the domestic market. Two weeks later, it announced a ban on exports with immediate effect, after extended Monsoon downpours delayed harvests and supplies shrivelled(Newspaper). Is it something new or unpredictable for Bangladesh? The answer is "no". India‟s move to restrict the export of essential commodities like an onion is not new. We had an experience regarding rice in 2008 when India restricted shipments. that caused price jumping in Bangladeshi market. And the lessons were? For faster recovery, we have to keep diversified sources open. Because when it is necessary there have to have a contingency planning in advance. So prediction in terms of balancing the market is very important. In my ongoing study of “Fluctuations in different essential commodities”, I found out that 50% of the market has been destroyed by the political business syndicates. How? Market monitoring does not mean policing. The government should assume the role of a facilitator so that adequate information flows in the market to help the market function properly. Develop a policy and maintain it. Also easing procedures for imports and exports to facilitate faster trade and measures to increase the yield of onions and developing storage facilities to reduce post-harvest loss. We have to develop our national capacity to produce our foods. We will not require imports if we could properly stock and increase yield.
What about the creation of an open database on demand and supply of essential commodities?
A hike in onion price affects the poor. I found no alternative but to monitor the onion market regularly. If Bangladeshi markets largely depended on Indian onion, the government should have followed the onion production trend in India a long time ago and taken steps accordingly. The government should forecast local cultivation and production in the coming seasons and discourage imports so that farmers do not incur losses in the event of ample supply of the perishable. But without collecting the data from the field, It can‟t be done. So, for the communication gap, Farmers hardly get into knowledge about market demand and price. This is where farmers get caught into some corrupted invisible hands.
CASE STORY – Khatunganj (Newspaper)
I have found a case at Khatunganj that describes as follows,“ Some Locals said rotten onion is being thrown away every day here. The onion had been stored by wholesalers who tried to cash in on the high demand for the common kitchen item in Bangladesh”. Onion traders believe that the crop was a little rotten when it entered Bangladesh and decomposed more after being stored in the warehouses. Lots of rotten onions were seen dumped into the canal in Firingi Bazar Bridge Ghat area. Some local youths were seen sorting out the better quality onion from there.
Some newspapers said they were selling the half-rotten onion at Tk 40-50 per kg during that period. There was some good initiative from the Government. For faster export, Taxation was taken off from the onion. This step perhaps cured the moment for a little bit. But, the power of that is something invisible and corrupted played the market. Maybe there is enough stock of onion but they are not being released to the markets. Syndicates of importers and various groups in different areas are causing an unusual hike in onion prices.
Other News by This Author
Economic conflicts over the South China sea
BA(HONS)in Economics and politics,
Visva Bharati University.
It’s important as tensions rise in the South China Sea, we need to understand how this complexity began and what international law says about freedom of navigation and competing for maritime claims in the waters. The view we have for the last couple of decades is not that much clear one, in fact, In 1982, the UN Convention on the Law of the Sea was adopted and signed, formalising extended maritime resource claims in international law. At this time, no fewer than six states had laid claim to the disputed Paracel and Spratly islands in the South China Sea. Since then, it has been a creeping militarisation of the waters by nations seeking to secure extended maritime resource zones. In 2009, Vietnam began reclaiming land around some of the 48 small islands it had occupied since the 1970s. On the other hand with a vital response, China began its much larger reclamations on submerged features it first began to occupy in the 1980s. By around 2016, these reclamations had resulted in three military-grade, mid-ocean airfields that sent shockwaves around the world, provoked in part by China breaking its own pledge not to militarise the islands. So what brings all these countries so much despair about this conflict? The answer is simple. The South China Sea is a marginal sea of the Western Pacific Ocean. It is bounded in the north by the shores of South China, in the west by the Indochinese Peninsula, in the east by the islands of Taiwan and northwestern Philippines (mainly Luzon, Mindoro and Palawan), and in the south by Borneo, eastern Sumatra and the Bangka Belitung Islands, encompassing an area of around 3,500,000 km2. It communicates with the East China Sea via the Taiwan Strait, the Philippine Sea via the Luzon Strait, the Sulu Sea via the straits around Palawan, the Indian Ocean via the Strait of Malacca, and the Java Sea via the Karimata and Bangka Strait. The Gulf of Tonkin and Gulf of Thailand are both parts of the South China Sea, and its shallow waters south of the Natuna Sea. The South China Sea is a region of tremendous economic and geostrategic importance. One-third of the world's maritime shipping passes through it, carrying over USD $3 trillion in trade each year. Huge oil and natural gas reserves are believed to lie beneath its seabed. It also contains lucrative fisheries, which are crucial for the food security of millions in Southeast Asia. The South China Sea Islands, collectively comprising several archipelago clusters of mostly small uninhabited islands, islets (cays and shoals), reefs/atolls and seamounts numbering in the hundreds, are subject to competing claims of sovereignty by several countries. These claims are also reflected in the variety of names used for the islands and the sea. Japan and South Korea rely heavily on the South China Sea for their supply of fuels and raw materials and as an export route, although the availability of diversionary sea lanes bypassing the South China Sea provides non-littoral states with some flexibility in this regard. So it’s clear that the economic gateway for many countries is lying under the seabed of the south china sea. So geographically the sea plays a vital eco-political role here. The South China Sea has been a longstanding source of tension and distrust in the region Competing for claims of territorial sovereignty over islands for more than a couple of decades. The UNCLOS (United Nations Convention on the Law of the Sea), which was formed in 1982 and came into force in 1994, established a framework intended to balance the economic and security interests of coastal states with those of seafaring nations. UNCLOS enshrines the Exclusive Economic Zone (EEZ), a 200 nautical mile area that extends sole exploitation rights to coastal nations over marine resources. However, this exclusive zone was never intended to serve as a security zone, UNCLOS also guarantees wide-ranging passage rights for naval vessels and military aircraft.
In 2010 spring, “PRC reportedly communicated to United State officials that the South China Sea was "an area of non-negotiable 'core interest', with Taiwan and Tibet on the national agenda. However, Beijing appears to have backed away from that assertion in 2011”. Again after a year and a half around 2012 October the PRC's Global Times newspaper, published by the Communist Party People's Daily group, editorialised on South China Sea territorial disputes under the banner "Don't take peaceful approach for granted". The article referenced incidents earlier that year involving the Philippines and South Korea detaining PRC fishing boats in the region. "If these countries don't want to change their ways with China, they will need to prepare for the sounds of cannons. We need to be ready for that, as it may be the only way for the disputes in the sea to be resolved.
In the bigger context, a BBC journalist writes, “the Trump administration has pledged to overturn what it says is 40 years of policy failure concerning China. Washington has recently criticised Beijing on issues ranging from its handling of the coronavirus pandemic to human rights violations against Muslim minorities in Xinjiang and how it has dealt with pro-democracy protests in Hong Kong. But it was China's land reclamation projects in the South China Sea that prompted the rest of the world to reassess Beijing's international ambitions. And the stakes in the region are incredibly high. In these seemingly insignificant island chains and reefs, there are growing risks of military conflict between the world's two most powerful countries”.(Zhaoyin Feng, BBC Chinese)