The new minimum export price (MEP) set by the Indian government resulted in low volumes of onion import through Hili and Sonamasjid land ports on Sunday.
Onions began to be imported through Hili land port  after the new MEP took effect on the day.
Onion importers Mahfuzar Rahman and Saiful Islam told Dhaka Tribune that the new MEP of $852 had negatively impacts on traders like them, as they were now forced to open new letters of credit (LCs).
These new LCs were forcing them to purchase Indian onions at no less than Tk72-73 per kilogram, they added.
"Those who had previously opened LCs at older and lower rates between $250-300 have to amend their LCs by adding the increased rate, leading many to abandon their onion imports," one of the importers lamented.
Many importers like Mahfuzar and Saiful are sceptical about the rates at which they would have to sell the onions in the local markets.
Aftabuzzaman, manager of Agrani Bank's Hili land port branch, acknowledged applications submitted by several importers to get their LCs readjusted.
Sohrab Hossain, public relations officer at Hili land port, said only six trucks came through the port Saturday evening, with a slightly higher number of trucks on Monday.
Meanwhile, around 62 trucks carrying Indian onions entered Sonamasjid land port on Sunday.
Mainul Islam, assistant manager of Panama port link, said before the MEP announcement, more than 189 trucks had come through last week from Tuesday to Thursday.
Rafiqul Islam, president of Sonamasjid Land Port Importers and Exporters Association, said LC values for onion import last week was between $350-$400, but the new rate of $852 will discourage many importers from continuing to import onions for the next few weeks.
He said last week the price of onions at wholesale price was between Tk36-40, but yesterday it rose to Tk50-55.
On Friday, the Union Government decided that the export of all varieties of onions would be permitted only on letter of credit (LC) subject to minimum export price (MEP) of $850 freight on board (FoB) per ton until further orders, consumer affairs, food and public distribution ministry of India said in a statement issued yesterday.
Anil Thakur, an Indian onion exporter, said that the recent flash floods in several Indian states disrupted onion cultivation, which resulted in very low yield.
"This led to onions being sold at Rs50 per kilogram across India, which reflects a huge rise in onion prices," he said, adding, "The government intends to control the local onion prices, and discourage its export to Bangladesh for the time being."