After the Indian commerce ministry announced the decision on Friday, Bangladeshi traders said they were importing onion from the neighbouring country at $250 to $300 per tonne last week.
Prices of onion have increased in India after floods hit productions in Maharashtra and Karnataka recently.
In Delhi and Kolkata, retail prices of onions have been Rs 40 to Rs 50 per kilogram, which were between Rs 20 and Rs 30 two weeks ago, according to the local media.
The kitchen staple imported from India was priced between Tk 50 and 55 in Dhaka while locally produced varieties cost between Tk 55 and 60 on Friday.
The Bangladeshi onion importers will have to start opening LCs with the new minimum price set by India on Saturday as the latest instructions already reached customs authorities in the land ports.
Mostafizar Rahman Mostaque, general secretary of Hili Land Port Export-Import Group in Dinajpur, said Indian exporters had hinted that onion prices would cross $400 per tonne.
“But the Indian government has increased it a lot more,” Mostaque said and added that he believes prices of Indian onion will rise in Bangladesh next week.
Abu Hasan, general secretary of Bhomra Land Port Exporters-Importers Association, said prices of Indian onion might cross Tk 100 a kg in the retail markets.
Wholesalers in Dhaka, however, are not so worried. They said India’s decision would not affect Bangladesh’s markets intensely as onion is exported also from other countries now.
“Our traders have already started to import onion from Turkey, Egypt, Pakistan and other countries. So India’s decision is not supposed to have such effects on the market that can make it unstable,” wholesaler Abdul Majed of the capital’s Shyambazar said.
Bangladesh produces 1.7 million to 1.9 million tonnes onion annually and imports 700,000 tonnes to 1.1 million tonnes to meet the domestic demand.
The importers bring onion mostly from India as the transport cost is low due to the close proximity.
India raised minimum export price on onion from $430 to $850 by the end of 2017.
Retail price of Indian onion stood at Tk 75 a kg in Dhaka at the time while prices of locally produced onion crossed Tk 100 per kg.
[Additional reporting by Dinajpur and Satkhira correspondents]