The import of onion from India to Bangladesh was halted on Monday as the Indian government imposed a ban on the export of the item.
The Indian government prohibited the export of all varieties of onions until further notice following a notification on Monday by the Directorate General of Foreign Trade, under the commerce ministry of India.
The price of onions more than doubled in Bangladesh in the last two weeks due to the off-season shortage in supply of the local onions and its slow import from India, traders said.
They said that India squeezed the export of onion over the last 20 days against the backdrop of a price hike of the item in India.
On September 29, last year, India imposed a ban on the export of onion to Bangladesh due to a price hike of the item in its domestic market and the price of the Item shot up to Tk 300 a kilogram in Bangladesh.
India had lifted the prohibition on March 15 this year.
Meanwhile, the National Board of Revenue on Monday declined to waive customs duty on the import of onion to ensure fair price for farmers and reduce dependence on import through encouraging domestic production.
Customs duty at the rate of 5 per cent will also not cause any price hike of onion at the local market, the NBR said in a letter sent to the commerce secretary Md Jafar Uddin.
Commerce ministry on September 7 requested the revenue board for the withdrawal of duty to keep the price of the item stable in the domestic market, arguing that the imposition of the duty would leave a negative impact on the price of the item in the local market during the lean period from September to March.
Customs wing of the NBR in the letter to the commerce secretary said that the government imposed duty in the budget to ensure fair price for farmers and to reduce the dependency on imported onion.
Local growers will be deprived of fair price if the import duty is withdrawn, the letter signed by NRB second secretary (customs policy) Mehraj-ul-Alam Samrat said.
Local farmers will also be affected due to the rise in its import, it said.
In addition, the revenue board thinks that the 5 per cent duty on the import of onion will not have any impact on the price hike of the item in the local market, it added.
Even before issuing the notification of the export ban, Indian authorities stopped the export of onion to Bangladesh through all land ports between the two countries from Monday morning.
Bangladeshi importers and customs clearing and forwarding agents said that many onion-laden trucks were waiting on the other side of the border at Hili, Bhomra and Benapole land ports on Monday since exporters did not get clearance from the Indian customs.
Malda customs division in an e-mail on Monday informed Hili customs station that the export of onion will remain suspended on the day due to some possible changes in policy of India.
‘Joint secretary, customs, has informed that the export of onions should be stopped as some policy change is likely today,’ the e-mail of Malda customs division had said.
Quoting Indian traders, Bangladeshi importers and customs clearing and forwarding agents said that the Indian customs put a hold on releasing Bangladesh-bound onion through the land ports as flood damaged the crops in many parts of India and the prices of the item started to go up in the country.
Motiar Rahman, director of India-Bangladesh Chamber of Commerce and Industry, said that the Indian authorities imposed a restriction on onion export on Monday and only two trucks of onion received clearance to enter Bangladesh through Benapole land port.
‘Onion import through Hili land port remained suspended from Monday morning as Indian customs are not giving clearance,’ said Mobarok Hossain, an onion importer.
Following the export ban, the wholesale price of the item increase further on Monday night in the city market and the locally produced onion was selling at Tk 70 a kg while the imported item was selling at Tk 50 a kg.
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