Bangladesh’s onion crisis is no longer just a tale of poor storage or mistimed imports. It is a story about who controls the country’s food flows, and who does not. For years, onion prices have swung wildly: farmers dump onions at throwaway prices during harvest, while consumers later face sudden spikes that feel both arbitrary and unavoidable. Between these two extremes lies a broken supply chain, dominated by speculation rather than structure.
Over the past decade, Bangladesh’s corporate groups have quietly transformed the food economy. Companies like ACI, PRAN-RFL, Akij Bashir, Meghna Group and others now operate across seeds, fertiliser, processing, logistics and retail. ACI’s Shwapno alone has become the country’s largest organised grocery chain. Yet onions, one of Bangladesh’s most politically sensitive staples, remain stuck in a fragmented, informal system ruled by middlemen and guesswork.
This raises an uncomfortable but necessary question: can Bangladesh’s corporate giants become stabilisers of the onion market instead of remaining spectators, or worse, opportunistic traders?
At first glance, the idea sounds dangerous. In Bangladesh, whenever prices rise, suspicion immediately falls on ‘syndicates.’ The fear is that allowing large companies to store onions would simply legitimise hoarding. That fear is understandable, especially given what has happened in rice. But it misses a crucial point. Price volatility already thrives precisely because there is no modern, accountable storage and distribution system. Chaos, not capacity, is what invites manipulation.
Every year, millions of farmers harvest onions in March and April and are forced to sell immediately because they lack storage and cash. By September and October, when supply tightens, consumers panic and prices soar. The vacuum between these two moments is filled with speculation, panic imports and adhoc government decisions.
Large FMCG and retail groups are structurally different from traditional onion traders. They operate nationwide procurement networks, warehouses, transport fleets and digital inventory systems. They have access to finance and professional management. Most importantly, they depend on steady, year-round supply to serve supermarkets, food processors and institutional buyers. A company that needs onions every week has little incentive to gamble on artificial scarcity.
Globally, this is how modern onion markets function. In the Netherlands, Europe’s largest onion exporter, onions are cured, graded and stored in ventilated warehouses for up to nine months. In India, where onion prices can make or break governments, the state maintains a buffer stock while private operators handle procurement and storage. Turkey and Egypt rely on drying yards and warehouses to smooth supply across seasons. These systems are not perfect, but they share one trait Bangladesh lacks: predictable logistics governed by rules.
Bangladesh, by contrast, relies on a mass of smallholders selling under pressure, layers of intermediaries profiting from arbitrage, and a government oscillating between import bans and emergency imports. In such an environment, corporate players stay cautious because the rules are unclear. No firm will invest heavily in onion storage if imports can suddenly flood the market or stored stock can be branded hoarding overnight.
If Bangladesh wants the private sector to help stabilise onions, the rules must change decisively. The goal is not to hand over the market to big business, but to bind private capacity to public objectives. Onion storage should be recognised as essential national infrastructure, not a suspicious activity. Ventilated sheds, drying yards and grading facilities should qualify for tax incentives, subsidised credit and matching grants – just as potato cold storage once did.
But these incentives must come with non-negotiable conditions. Large-scale storage should require mandatory digital reporting of stocks. There must be clear limits on inventory concentration. Price bands should be defined so that when prices breach an upper threshold, stored onions must be released. Severe penalties, including licence suspension, should apply to coordinated withholding. Storage without transparency is hoarding by another name; storage governed by enforceable rules is stabilisation.
Finance is equally critical. Farmers and traders dump onions early largely because they lack affordable working capital. A warehouse receipt system could change that. If onions stored in certified facilities could be used as collateral, farmers and aggregators could borrow instead of selling at distress prices. Banks would lend more willingly if the produce was held in audited, professionally managed warehouses. This single reform could reduce seasonal price swings more effectively than repeated import announcements.
The government must also anchor the market with a modest strategic buffer. Procuring onions during harvest at a floor price and releasing them when prices spike would provide a reference point for both farmers and traders. Private storage operators could be contracted to hold part of this buffer, but release conditions must be automatic and publicly visible. Weekly stock disclosures would kill rumours before they move prices.
Critics will argue that this is unrealistic in Bangladesh’s political economy. Yet the current system is far more vulnerable to manipulation. When stock levels are unknown, a few thousand tonnes held back can raise prices by Tk20 or Tk30 per kilo. A transparent, warehouse-based system makes such games harder. Large companies, precisely because they are visible and regulated, are easier to hold accountable than thousands of anonymous traders operating from informal godowns.
There is also broader developmental logic. Corporate groups are already embedded in rural Bangladesh through seeds, inputs and contract farming. If they begin procuring onions directly, grading and storing them, farmers will receive clearer price signals and incentives to grow storage-grade produce. Losses will fall. Imports will become a backup, not a crutch.
None of this will eliminate imports entirely. Weather shocks and disease will always require flexibility. But with storage and rules in place, Bangladesh would no longer be forced into panic buying at peak international prices or sudden bans that distort markets. Imports could be timed and calibrated based on data, not desperation.
The choice facing policymakers is not between free markets and state control. It is between a chaotic, opaque system that breeds volatility and a structured one that uses private capacity under public rules. Bangladesh’s corporate giants already shape how the nation eats. The question is whether the government will give them a framework that rewards stability instead of speculation.
Onions may seem mundane, but they expose how deeply broken Bangladesh’s food logistics are, and how much potential exists to fix them. If large FMCG and retail groups are brought into a transparent, regulated storage and distribution system, onions could become a model for managing other perishable staples. That would not just tame prices. It would mark a decisive step toward a more resilient and modern food economy.
The writer is a Port Shipping & Logistics Strategist and Adjunct Faculty, Bangladesh Maritime University
