Govt. increases import levy on big onions

By Waruni Paranagamage

The Government yesterday imposed a Rs. 20 per kilo levy on big onion imports with immediate effect, justifying the move stating it was to safeguard local producers.

As a result of the tax hike, the selling price of imported big onions will increase from Rs. 40 to Rs. 60 in the local market.

The Finance Ministry issuing a statement said that the decision was made considering the requests made by local producers island-wide to impose a levy on imported big onions to maintain a comparable selling price in the local market, while keeping up with the constant demand.

The Government reduced the import levy on big onions by Rs. 10 per kilo in December last year. Hence, a kilogram of imported big onions was sold at a lower price compared to the locally-produced big onions, attracting a high demand in the local market.

As a result the big onion farmers in Dambulla accused the Government of importing low quality big onions from India during the local harvesting period and requested a levy increase on imported big onions.

“Today a kilogram of local big onions (local seeds) was sold between Rs. 70 and Rs. 80 and local big onions (Indian seeds) was sold at Rs. 45 to Rs. 60, while a kilogram of imported big onions was priced between Rs. 30 to Rs. 40,” Dambulla Economic Centre Manager Christy Wijeratne told the Daily FT.

Describing the situation Wijeratne revealed that the bargaining power of buyers island-wide in economic centres had brought this issue to light. 

He went on to say that there was no huge impact on the local farmers from the imported big onions.

“It was just that the buyers tried to bargain on the price of locally produced onions (Indian seeds), because they had an uninterrupted supply of big onions imported from China and Pakistan at a lower price. The harvest from the local seeds receives high demand and a fair price in the market,” he added.

He further asserted that the Indian production was not being imported currently due to the price hike, but the country was importing from China and Pakistan.

The Ministry of Agriculture anticipates 65,000 to 70,000 MT of big onion production from the ongoing Yala season. According to Ministry data 4,800 hectares of big onion have been planted island-wide. 

Wijeratne said they expected to receive a harvest of 1,000,000 kilograms of big onions at the Dambulla Economic Centre per day during this Yala season.