Govt fixes edible essential oil price to tame volatility
The federal government yesterday fixed edible oil prices to tame the volatility in the domestic marketplace and curb price manipulation by a section of unscrupulous traders.
The new price came into effect immediately. The price of loose soybean essential oil was preset at Tk 115 per litre at the retail level, explained Commerce Minister Tipu Munshi after a meeting with key refiners, importers, traders and wholesalers at the secretariat in Dhaka.
The approach came as loose soybean oil was selling at Tk 116-Tk 120 per litre at the retail level in the administrative centre, up 3.5 per cent from Tk 112-Tk 116 per month ago.
The cost of non-branded soybean oil averaged Tk 87 per litre a year ago, meaning it surged 36 % now in comparison to a year earlier, market prices data published by state-run Trading Corporation of Bangladesh showed.
Retail rates of branded soybean essential oil advanced 29 per cent year-on-year to Tk 130-Tk 140 per litre yesterday, the average price of which is add up to the government-fixed rate.
The government set the cost of five-litre branded soybean oil at Tk 630, that was higher than the average price of Tk 610. The cost of super palm essential oil was set at Tk 104 per litre.
"The market will be secure if all mills adhere to the decision and keep carefully the supply easy," said Abul Hashem, basic secretary of the Bangladesh Edible Essential oil Wholesalers Association.
Many wholesalers have obtained edible oil from refiners at the prices that are greater than the federal government rates, he said.
The government-fixed rate for per litre bottled soybean oil is Tk 127 at the distributor level and Tk 123 at the mill gate.
The price of five-litre bottled oil has been fixed at Tk 630 at the buyer level, Tk 610 at the distributor level, and Tk 590 at the mill gate.
The government set the cost of loose soybean oil at Tk 110 per litre at the distributor end and Tk 107 at the mill gate.
Bangladesh requires 20 lakh tonnes of edible essential oil annually, and it meets 90 % of the demand through imports, according to Mahmodul Hasan, assistant chief of the Bangladesh Trade and Tariff Commission, while presenting a paper in the meeting.
The country spent Tk 12,280 crore to import edible oil in the fiscal year of 2019-20, Bangladesh Bank info showed.
At the briefing, the commerce minister blamed the increased prices of soybean and palm oil in the international market and the abnormal hike in transportation costs for the spiralling selling price of the key cooking ingredient in Bangladesh.
The cost of edible oil will be reviewed after 15 times as practised by the National Price Fixing Committee on Essential Commodities under the commerce ministry.
Mostafa Kamal, chairman and managing director of Meghna Band of Industries, an edible essential oil processor, said the share of edible essential oil was lower.
There were production challenges in major markets such as for example Argentina and Brazil, while China, a major importer, is investing in a large amount of cooking oil from international markets, he said.
Kamal urged the federal government for an instant release of imported goods from ports and assured that they might import an adequate level of edible oil to meet up the local demand.
Abdur Rashid, a wholesaler in Chattogram's Khatunganj, among the main wholesale market segments for commodities, said the demand for cooking essential oil was increasing ahead of the fasting month of Ramadan.
"But the supply isn't increasing good growing demand," he said, adding that wholesalers need to wait for days to achieve the delivery of edible essential oil.
"If anyone wants to obtain the delivery immediately, they must pay a supplementary Tk 100-120 for every delivery order," he said, adding that the delivery orders of soybean essential oil were offering at Tk 4,460- Tk 4,480 per maund.
Anower Hossen, a store in Hamjarbag Bazar in the port metropolis, said fixing the purchase price will not control the oil industry if the supply will not get a boost.
"To keep the rates and the supply normal, the federal government should beef up monitoring from mill gates to retail marketplaces."
