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The Curious Case of Onion by Abdul Awal Mintoo

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The Curious Case of Onion

Abdul Awal Mintoo

M.Sc in Agricultural Economics

Former President, FBCCI



There comes a time when people experience ghostly things that glow with mystery and disbelief. That is what we are experiencing right now in Bangladesh -- the ghost story of onion. In Bangladesh’s kitchen markets, this cooking staple is selling at prices higher than that of apple.  This episode, I think, will haunt people for many years.


The onion price, a sensitive issue politically, started soaring in September last. It happened dramatically and climbed to eye-watering levels. While the writing of this piece was in the process (November 15, 2019), the locally produced (local variety) of onion was selling at Tk. 200 per kg in retail markets. Onions imported from India, Myanmar, and Egypt are sold at Tk. 150–160 per kg, whereas in today’s market chicken is sold at Tk. 150 per kg while apple at Tk. 180 per kg. This unusual high price of onion is attributed to production loss in some parts of India. As a result, India had raised the export price first and then stopped its export.


The Saga of Onion


Onion is a key ingredient in most Bangladeshi dishes. The sudden price hike has sparked anger among the population, not only against the government but also against onion traders for alleged collusion to raise the price. Some people are also airing anger on our neighbor – India -for raising the minimum export price first and then putting restrictions on its export. Such price surge usually hit the low-income people and poor households hardest. In India, the price hike of onion usually becomes a political issue. High onion prices, for example, were regarded as the decisive factor responsible for the defeat of the ruling party at the Centre and many state governments in 1980, and even may be the cause of losing a considerable number of seats in state legislatures of Maharashtra and Haryana at the end of October 2019.


It is difficult to guess what is the political ramification for high onion price here. Because these days voters in Bangladesh are not allowed to show their displeasure through the ballot. Nevertheless, onion has been hitting news headlines for months. This alone is indicative of huge social ramifications. In addition to regular news and editorials, columnists are also writing articles on issues related to onion giving their views, comments, suggestions, as to how the nation can produce more onions to meet the demand and keep the supply and price stable in the future and prescribing solutions, but always personifying onion traders for the price hike. Political leaders and civil society leaders are also not much behind. Some politicians even preaching the population that “eating onion is not necessary indeed”. As a consumer and businessman, I do not agree with such a solution to the onion crisis. Such solutions are like; “to avoid the headache, instead of medicine cut off the head”. Then there will never be a headache and no more troubles. Their mentality synonymies probably with their thinking of troublesome and incommodious democracy; that those who are shouting for restoring democracy and fundamental rights in the country, shall be implicated and incriminated in the false cases involving arson and violence. Then put them behind the Bar. That is the easy way to escape from the troublesome democracy and force them to forget about their rights eventually.


However, it is evident from multifarious activities that the government is also very concerned about the onion issue. Alongside the newspapers, government officials are also regularly talking about it. They seem to be very vigilant. They are very busy to increase the supply by removing various bottlenecks, including import and unhindered clearance at ports. Some businessmen cronies already opened a letter of credits for large scale import from various countries, probably at the expense of public because these cronies does not have to repay the loan to banks. As a matter of gimmicks, some even planned to import onion by air. Local officials are visiting wholesale and retail markets every day keeping their watchful eyes on sellers so they do not raise the price. In some cases, they are punishing onion sellers for selling it at a price which, they think, unreasonable. Newspaper reports shows more than 2000 onion traders are punished already. The police, RAB, intelligence agencies are also not far behind. They are collecting all types of market information and asking other agencies to take action against onion sellers, as they think necessary.


One may wonder what is the “reasonable price” of onions, anyway! Who does decide the reasonability? Columnists, government officials, law enforcement agencies, businessmen – who should decide or who has the rightful authority?


In the meantime hundreds of articles are written detailing the top to bottom and head to tails and historical background of onions from time immemorial like; when human civilization started to consume onions, is it vegetables or spice, why tears come out when you cut onions, how and why human use to consume onion as a power booster, the sacredness of onion, how and why some people in ancient time used to perform PUJA of Onion to enrich the afterlife, what and how many types of health benefits, taste, and smell of it, etc. etc. However, newspapers, television channels, columnists, consumers, consumer protection rights groups, officials of all ranks have something in common in their views; they all claim that the onion businessmen, including importers, traders, wholesalers, retailers all are in collusion and made a Syndicate to hike the onion price to make extra profits. Such collusion is to steal money from consumers’ pockets. This is immoral, if not illegal. I am not so sure what is the punishment for immoral behaviour in business or which part of the business is immoral or even illegal and what should be the punishment. All these reminds me of the old Bengali proverb – “JOTO DOSH, NANDA GOSH”. In other words, no matter what; all faults lie with onion traders, because they are culprit profiteers, and thus immoral. They are only after excessive profit. They are like blood-suckers who do not care about the misery of consumers.


If we take into account the news coverages of all recent issues of national importance like illegal casino operations by ruling party leaders, Abrar killing, Bhola incidence, clean-up campaign, rail accidents versus news related to onion, it will top all other topics. It also looks certain that the newspapers will continue to run reports on onion for a few months more. All this may sound very sympathetic to consumers to everyone but to me it seems like a choir, where consumer sympathizers are trying to provide solace to them but hardly it will be of any help to produce more onions, or any help to farmers to boost production or its supply in the market or to reduce the price.


Being a businessman, fortunately not involved in onion, trying to boost the productivity of many agricultural crops including onions and student of agricultural economics for many years, to reduce the supply gap and by virtue of heading FBCCI for two terms, I feel pity for these businessmen who are dealing with onions. I thought it will be not only frivolous but also immoral and unwise not to come forward to the defense of those businessmen who are working hard to ensure the stable supply of such important food items, but openly being accused of immoral profiteers in the eyes of the public. One may raise questions and ask why do I have to defend onion traders who are “unscrupulous”.  Many people may even believe that defending them will be an immoral act. To be the truth, everyday morning when I look into the headlines of at least 20 news dailies (English – Bengali) hardly I see not much of the news, other than fraudulent elections, stealing money from Banks, illegal business, killings, extrajudicial killings, forced disappearances, rapes, extortion, road accidents and deaths as a result, corruption, Money laundering etc. By seeing, hearing and reading such stories day after day, year after year, it has become very difficult to make a judgement and figure out which one is drama, which one is true or false, what is moral or immoral or what is even political. It has become also difficult to figure out between right or wrong. Thus it may be possible that part of my power of understanding may have extricated or became dysfunctional. Under such circumstances, I find some reason to defend them. Thus decided to write after a while. However, because of the negative perception of business as a whole, it may be worthwhile  to discuss the issue related to business, morality and profits, before I write in details about the onion production, productivity, supply, demand, shortage and storage, and other related issues including the cost of production of onion and profitability.



Business, Profit and Morality


Businesses must make a profit in order to survive, just as humans must breath to live on. Business houses are neither moral nor immoral, but people who run the businesses are. But making profit, on one hand, is an essential element for the efficiency of a productive society – efficiency in the sense of avoiding waste – and on the other, it is the determinant of production of right quantity of goods and services or to be imported by using the proper technology and market knowledge. On the other hand, profit is rightly associated with roguish materialism of life. Materialistic thinking always contrasts with the ideals of humanism and higher spiritual instincts, or the deeper meaning of life. According to contemporary Western morality; profit is good but profiteering is bad. Of the two grounds put forward, one is the immorality in earning an excessive profit or seeking ‘shameful gain’ from the handicap of one’s fellow-creature. Nevertheless, free-market economy or economic systems could not function well, without the gainful material consideration.


The principal argument against the classic liberal society is “that its economics is dominantly driven by profit motive”, and profit is immoral. It is associated with greed. Businessmen often fail to carry out their responsibility as they often seek only material gains to advance their own narrow interests and not those of the community as a whole. They become blind to their own gains at the expense of the social welfare of the community.


In free-enterprise society, profit is the driving force. But at the same time if someone is earning too high a profit by market standards, someone else will start a rival business, provided enterprises can be founded, run or shutdown freely by their owner. This is the  classical liberal principle. The new competitor will offer the same goods at a lower price, or better goods at the same price, or some other combination, forcing to reduce price and profit. Profit, after these market adjustments, is the market return on capital, in the same manner as wages are the market return for labour.

The quest for profit causes productive resources to flow into those fields whose demand exceeds supply and stay away from those whose supply exceeds demand, and thus profit is the regulator that causes the right goods and services to be produced, in the right quantities and at the right prices, to meet demand at a reasonable cost.


Profit VS Morality

I believe profit as a motive is overstated by those who oppose it on principle. Many entrepreneurs are motivated by occupational satisfaction as much as by profit, though profit is necessary for their survival. But interventionists tend to associate profit across the board with greed, racketeering, and other unpleasant and immoral instincts. In economic theory, classical liberals think of profit as merely the regulator of the market. Profit determines; what quantity to be produced, what should be the quality, who can buy such goods, what prices are to be paid, and who gets due benefit from the production and supply of goods. These activities may be associated with greed and may even lack the social consideration, but they may also be associated with acts of equity and humility.  

Nevertheless, morality, piousness, moral behavior, virtues, in a society is not the issue only applicable to businessmen. All these virtuous or traits collectively belong to all groups in the society; Doctor, civil servants, educators, politicians - all. One thing is certain that such traits are hidden in the political and social structure of the society, especially within the character of politicians. It will be absolutely wrong to expect morality only the businessmen, while all other groups are corrupt and lack morality. Anyway, now I would like to return to my to days subject of writing - ONIONS.


Demand Versus Supply


The demand for onions in Bangladesh is growing steadily in conjunction with the population growth and rising per capita income. The income and expenditure survey of BBS (2002-2007-2012)shows that the consumption of onion was 5.6 kg in 2002 and increased to 6.8 kg in 2005 and 8.2 kg in 2012 per capita per year. Such an increase in consumption equals to almost 4% per year. IFPRI (International Food Policy Research Institute)in their analysis in 2013 projected that by 2020 the demand for onions in Bangladesh will be about 21 lakh tons or yearly demand growth of 5% per year.


The IFPRI analysis also shows that urban residents in 2010 consumed 40% more onions per capita than the rural population. Thus, it can be assumed that as urbanization is accelerating even speedily than it was predicted in 2010, due to uneven rise in income among the urban and rural population, slow growth of rural non-farm employment, river erosion, climate change, so is the consumption of onions. It is estimated that the minimum demand for onion in 2018 was 29 lakh tons and may increase to a minimum 31 lakh tons in 2019. Therefore, the real aggregate onion consumption per capita has grown at a rate of 6% or more.


Import Statistics of the Bangladesh Bank (BB) and that of the Department of Agriculture Extension (DAE)estimated based on local production, show that the domestic production was 23 lakh tons in 2018, while its imported amount was about 11 lakh tons. This equals the demand of 34 lakh tons. However, BBS Household expenditure survey shows that the local production of onions is about 18 lakh tons and adding to the import of 11 lakh tons, the total consumption equals to 29 lakh tons. Taking statistics of both of these government agencies into account, we may come to the conclusion that the minimum demand for onions was 30 lakh tons, while the maximum was 32 lakh tons in 2018, or 31 lakh tons on average.


If we take into account a 7 percent growth, then the demand for onion in 2019 should be about 33 lakh tons. Price; the right price for any product simply means “whatever price consumers are willing to pay when no scarcity” or supply equals demand. Therefore, if onions are to be offered at the right price, then we must increase our production and import the right varieties preferred by consumers to equal the demand. For the production of onion, I don’t think, we are cultivating less land but our total production is not enough to meet the demand because of low productivity. On import, unless right statistics are available on-demand, the right quantity can not be imported at the right time to meet the demand.









Production Versus Demand and Yield per Acre (Table-1)


Below is the year-wise production Acreage; Total production and yield per Acre from 1999 to 2018.

Figure in MT



Area (acres)










Import +Production













































































































































Source: DAE – Department of Agricultural Extension.

                BB – Bangladesh Bank – Year Book.


The above table brought quite a few issues to the forefront. These issues related to production acreage, productivity, yield per acre and discrepancies in production estimates between various government agencies. However, it does not give any indication as to what is the exact demand for onion. To make the production and import plan and prepare the implementation strategy to meet the future market demand, the first thing is to determine the exact demand. While the realistic consumption or demand seems to be 32 lakh tons, the supply seems to be gross quantity of 29 lakh tons or less. An exact quantity can not be determined because quantity imported before India prohibited export is not available. In addition, by its very nature, onion is not storable, and therefore certain percentage will be rotten and laid waste before it reaches to retailers.


Discrepancies in Production between DAE and BBS


Generally, the DAE plans the estimated acreage and production for all agricultural crops prior to production season each year, including onion. The DAE estimate is always 500-700 tons higher than that of the BBS. Reasons may be:


Methodology to estimate production


There is no real scientific methodology to estimate the ultimate acreage and yield per acre by the DAE, at least it is not known to the public. The DAE usually collects the information through its field offices to estimate the final acreage and quantity. However, there is a lack of precise information related to the type of seeds used for production and cultivation methods. Farmers usually use different types of seeds and cultivation methods, due to which the yield per acre and production quantity differ greatly.


Use of Bulbs to Produce Bulbs


Farmers store part of the onion bulbs for three reasons; (i) to cultivate onions through “Murikata” system in the next season (bulbs to bulbs); (ii) to produce bulbs which they use to produce seeds in the next season(seed to bulbs); and (iii)Using bulbs to produce seeds. It may be worth noting that the acreage cultivated to produce seeds does not produce marketable onions because bulbs are already rotten by the time seeds are ready to harvest.

Thus, the portion of onion produced never come to the market for sales. If the onion price goes up, as happens now(2019), then farmers sell part of this quantity for immediate profit. It is generally estimated that 10–12% of the total acreage is cultivated by bulbs (Murikata Systems) rather than from seeds. Each acre requires about 450 - 500 kg bulbs and therefore farmers require about 30,000 tons bulbs to cultivate 60,000 acres. Though produced, this quantity never comes to the market for sales.


Use of Bulbs and lands to Produce Seeds


Farmers produce about 800 tons of onion seeds for their own use. Production of seeds per acre about 150 kg. As such it requires about 7 acres of land to produce one ton of seeds. To produce 800 tons of seeds, it requires about 7,000 acres of land and 4,000 tons of bulbs. Thus, irrespective of the total acreage of cultivation and quantity produced, about 30,000 tons of bulbs never make to the market because land cultivated for seeds does not produce marketable onions. When seeds are ready to be harvested, the bulbs are already rotten.


Seed production reduces marketable onion in two ways; first - for 7,000 acres of seed production it requires about 5,000 tons of bulbs. Secondly - as per BBS productivity report of 4 tons per acres, the 7,000 acre could produce 28,000 tons. By adding 5000 tons of bulbs required and loss of 28,000 tons of bulbs production, both equal to about 33,000 tons. This quantity should be deducted from the estimated quantity.


Cultivation Method VS Productivity


The cultivation method make a great difference in terms of yield per acre and the total production. Usually, farmers on both sides of the Brahmaputra River cultivate onions by ‘broadcasting’ methods. These seeds are usually imported. In this method of cultivation and the type of seeds farmers use, the per acre yield is generally less than the ‘transplanting’ method. The quality of these onions is also different and storability is minimum, only about six to eight weeks.


Type of Seeds VS Productivity


The types and quality of seeds even make a bigger difference in yield per acre. Irrespective of yield, about 25–30% of the onions produced from farmers to farmers seeds are split bulbs. Most of these quantities, do not come to the market as onions.


According to various estimates, farmers use quality seeds in just about 20% of cultivated areas. The yield in these acreages is higher, and the percentage of split bulbs are much less. Therefore, we can reasonably estimate that the total production of marketable onions maybe somewhere only 13 to 14 lakh tons.


All or part of the above reasons may be attributed to reasons for the discrepancy between the DAE and BBS estimation of onion production in Bangladesh.


Acres of Production


Though DAE claims the cultivated acreage about 5 lakh acres but; about 7,000 acres are cultivated to produce bulbs that are used in the next season to produce onions.


30,000 acres are used to cultivate bulbs, that will be used to produce bulbs next season.



Type of Seeds VS Split Bulbs


As stated earlier farmers use total 1300 tons seeds to cultivate onions of which 500 tons are imported. 700 tons are farmers to farmers seeds. Only 100 tons of slightly better quality seeds are used to cultivate.


Seed the rate for cultivation is about 3 kg per acre. Thus, 250,000 acres are cultivated with their own seeds and 35,000 acres with slightly better seeds. As such total 285,000 acres are cultivated with local seeds. If yield per acre is 4 tons, then the total production will be equals to about 11.50 lakh tons.


However, 30% of these bulbs are split bulbs and equals to 350,000 tons. This quantity is never made to the market. These are consumed by farmers themselves and partly laid to waste..


Water Contents VS Storability


The main problem with onion is water content. The water content in the bulbs usually high, depending on the variety.


At the time, onions are harvested the water content remains very high and as it dries up in the farmers’ houses, there is a weight loss. The quantity depends on how long it remains in the farmers’ houses before it is taken to the market.


In addition, as the onions are dried up, a few layers of skins at the upper level are dried up and fallen. Thus, a small weight loss is usually there as well, though not so substantial. Some onions always get rotten while in the farmers’ houses.


The problem turns very acute if there is rain prior to harvesting. In that case, the farmers harvest a bit early before bulbs are fully blown to avoid possible rain. Otherwise, there may be an intrusion of rainwater inside the bulbs. This inevitably decreases the storability and increases the chances of rotting early.


Handling Wastage


Finally, there are some wastage incurs during the storage, processing, grading, handling, transporting between farmers’ houses to the local market, and then the local market to wholesalers and retailers, and finally to the consumers.


Myth VS Reality of Storability


There is a myth that cold storage (like potatoes are stored) is the answer to increase the storability of onions. Some also assert that if farmers have access to cold storage then they can sell onion throughout the year and sell it when price rises in the market. This will help them make more money.


This is not really a feasible proposition indeed because of the high-water contents in onions. Local varieties can be stored in farmers houses for 8-10 months.


Production Season – Bangladesh VS Elsewhere


Countries like India, Myanmar and Pakistan have vastly different agri-ecological zones and various ecosystems, including lowland and highlands. This allows farmers of these countries to produce onions throughout the year in all 3 seasons at one place or another. In Bangladesh, farmers can produce onions only in Boro Season.


Therefore, the answer to producing more onions, to meet the demand, lies in the improved high-yielding variety of seeds which are preferred by consumers, as well as 8-10 months storability in normal conditions at farmers’ houses.


Vegetables OR Spice – The Types of Onion


In some parts of India, Pakistan and other places, onions are consumed as vegetables, but in Bangladesh onions are consumed as a spice.


Local consumers prefer golden colour and high pungency of 17-18 Mumo (gm). The imported onions do not have such a level of pungency. Consumers preferences can be seen from the prices on onions in the market. There are always two prices -- one for the local onions which is always higher than the imported ones. For example, at present (November 15) the price of local onion is Tk. 200 per kg, while that of the imported onion Tk.160-170 per kg. The price of local onion is always 20% to 25% higher at any given time of the year.


Additionally, farmers require the onion variety which contain less water content for long storability. All these traits are available in the local ‘Taherpuri’ variety. This is small in size and its per acre yield is very low.


Statistics – Production, Supply and Demand


The other problem is the availability of the realistic supply and demand statistics. Without knowing the real demand, it is very difficult for the importer to make a pragmatic import plan and timing to import to meet the market demand. Unrealistic or wrong statistics create more problems and confuse the market. As stated times and again earlier the storability of onions is very short. Therefore, realistic production and demand statistics is very vital.


Production Acreage VS Productivity


Between 1995 to 2003, the acreage of cultivation and the production of onion in Bangladesh remained almost stagnant, at about 90,000 acres and the quantity of production less than 140,000 tons per annum, while the yield per acre was low and stuck within the range at about 1.65 tons per acre.


In 2004, a slightly better seed of ‘Taherpuri variety’ was available to farmers which helped the acreage, total production and the yield to increase. Between 2004 to 2009, the acreage jumped from the average 90,000 acres to 270,000 acres, an increase of almost 300%, while the total production increased from the average 140,000 tons per year to 750,000 tons, an increase of 500%. Similarly, the per acre yield increased by 10% during these 6 years to 2.99 tons from 1.65 tons per acre, an increase of 1.34 tons per acre.


From 2009, even a better and improved seed of ‘Taherpuri variety’ was available to the farmers and they responded very positively by increasing the acreage and producing more onions. And the per acre yield increased even further. For example, in 2009, the onion cultivation acreage was 2.7 lakh acres, while it got increased to 5.0 lakh acres in 2018, an increase of 185%, while the production of onion was increased from 9 lakh tons to 18.30 lakh tons, an increase of 205%. During these periods, the average yield increased to 36%, from 2.99 tons per acre to about 4.09 tons per acre. The farmers increased the acreage because of availability of better seeds which give more yield per acre and they made more profit out of the onion cultivation.


The productivity of seeds of different qualities of the same variety of onions are given below:


Comparison of Characters and Yield of Taherpuri Variety


Farmer Seeds (Local)

Quality Seeds (Local)




Sowing Time






Harvest days bulb






Harvest days seed






No. of Bulb/kg






Pungency Mumo (gm)






Storability: months


















Grade-B(Poor size &shape)






Grade-C (Split bulb)