Now, the international market for edible oils such as soybean and palm oil remains stable. Given the amount of soybean and palm oil imported and in the supply pipeline, there should be no shortage during the upcoming Ramadan.
However, traders have begun raising soybean oil prices following their usual trend, even a month before Ramadan.
According to the Trading Corporation of Bangladesh (TCB), the price of loose soybean oil has increased in the past week.
Additionally, bottled soybean oil is not available as per demand in retail markets, especially one- and two-liter bottles. Retailers claim they are not receiving adequate supplies of bottled soybean oil, which is causing inconvenience for consumers.
Sources say that every year, millers reduce the supply of soybean oil in wholesale, dealer, and retail markets before Ramadan, creating an artificial crisis to raise prices later. Retailers allege that the same strategy is being used again this year.
The Ministry of Commerce stated that to keep edible oil prices stable in the country, the interim government has waived VAT on it. However, millers are now trying to raise prices.
In the second week of January, the edible oil traders’ association proposed a price hike to the Ministry of Commerce. The proposal suggests increasing the price by 15 taka per liter.
A meeting was held with Business Advisor Sheikh Bashir Uddin on January 23, but no decision was made regarding the price increase of soybean and palm oil.
In response to the traders’ proposal, the Ministry of Commerce asked the Bangladesh Trade and Tariff Commission to submit a report with its opinion.
The report has not yet been submitted. According to the Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association, the government formulated a policy in 2011, which states that soybean oil prices should be adjusted based on global market prices and local costs.
Given the rising dollar value and other expenses, they claim that they are following the government’s policy in proposing a price adjustment.
It is worth mentioning that just two months ago, on December 9, the Ministry of Commerce adjusted soybean and palm oil prices at the millers’ request.
At that time, the price of bottled soybean oil was raised by 8 taka per liter, from 167 to 175 taka, and the price of loose soybean oil increased from 149 to 157 taka per liter.
The price of a five-liter bottle was raised from 818 to 860 taka. However, another price hike proposal has been made.
Dr. Moinul Khan, Chairman of the Bangladesh Trade and Tariff Commission, assured that soybean oil prices will not increase during the upcoming Ramadan.
Meanwhile, even before the proposed price adjustment, the price of loose soybean oil has already risen. Over the past week, the price of loose soybean oil in Dhaka’s retail markets has increased by 2 to 4 taka per liter.
Traders claim that the supply of soybean oil in the market is inadequate to meet demand, which is driving up prices. TCB also confirmed in its report that the price of loose soybean oil has risen in a week’s time.
Several retail traders, speaking on condition of anonymity, said they are not receiving enough supply of soybean oil. According to them, companies are not delivering oil as per their orders.
If they order five cartons from dealers, they only receive one or two cartons, creating a supply shortage.
Md. Ali Bhutto, a trader at Maulvibazar, the largest wholesale edible oil market in Dhaka, said, “The supply of soybean oil is not sufficient to meet demand. There is some shortage.
Millers are saying that soybean oil will arrive within 15 to 20 days, and then supply will normalize.”
It is noteworthy that the country’s annual demand for edible oil is 2.3 to 2.4 million tons, of which only 250,000 tons are produced locally.
The remaining 2 to 2.1 million tons are imported. During Ramadan alone, the demand rises to 300,000 to 350,000 tons.
Sources indicate that the government does not want the price of soybean oil to increase during Ramadan. To prevent this, the VAT waiver will remain in effect until the end of the holy month.
Acting Secretary of the Ministry of Commerce, Additional Secretary Abdur Rahim Khan, said, “There is no decision to increase prices. Soybean oil must be sold at the current price.”
At a recent event in Dhaka, Business Advisor Sheikh Bashir Uddin stated that there is no reason for prices to rise in the country, given the current international prices of essential goods.
At the same event, Sarzis Alam, the chief organizer of the National Citizens’ Committee, said that a few large companies dominate the country’s essential commodities market. He emphasized the need to transition from a cooperative market system to a competitive one.
