Edible oil price shock continues

The government yesterday increased the price of soybean oil by Tk 5 to Tk 7 per litre, dashing the hopes of the edible oil market in Bangladesh cooling off anytime soon.

It came a week after Commerce Minister Tipu Munshi said the prices of the key kitchen item would come down soon since their prices had dropped in the international markets.

Rather, the maximum retail price of a litre of bottled soybean oil was set at Tk 205 yesterday, up from Tk 198, and the loose soybean oil at Tk 185, an increase from Tk 180.

A five-litre container of soybean oil will cost Tk 997 from Tk 985 earlier, according to a notification of the commerce ministry.

However, the palm oil price was revised downwards by Tk 14 per litre to Tk 158.

It came a week after the Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers' Association, a platform of refiners and marketing companies, sent a letter to the commerce ministry and the tariff commission, saying the prices need to be adjusted in 15 days.

Yesterday's upward price revision was the third this year. On May 5, the price of bottled soybean oil had increased by Tk 38 to Tk 198, the sharpest increase in the country.

Refiners blamed the stronger dollar for the price hike of soybean oil.

The taka has fallen against the American greenback in recent months amid dollar shortages, making imports expensive. 

The global commodity market volatility, which was caused by the supply disruptions, pent-up demand, and the Russia-Ukraine war, has hit Bangladesh hard as the country depends on the international markets to meet at least 80 per cent of its edible oil demand.

Biswajit Saha, director for corporate and regulatory affairs of City Group, admits that the price of soybean oil is low in the international market at the moment.

"But when the edible oil was imported, the price was high."

The spike, which surprised many, will pile more pressure on the consumers struggling to make ends meet owing to higher costs of basic essentials.

"A week ago, the commerce minister said the price would come down. Now, we see the opposite," said SM Nazer Hossain, vice-president of the Consumers Association of Bangladesh.

Noor Mohammad, a private job-holder who lives in the capital's Adabar, said the price of every essential has gone up.

"I can't tell you exactly what a hard reality I am facing now."

Abul Hashem, general secretary of the Bangladesh Edible oil Wholesalers Association, said they didn't know about the latest price increase.

At present, edible oil is being sold at Tk 2-3 lower than the government's fixed price.

Soybean oil is being sold at Tk 176 per litre in the wholesale market in Dhaka and palm oil at Tk 155.

According to the National Board of Revenue, six large refiners imported more than 15.11 lakh tonnes of palm oil and soybean oil worth Tk 18,182 crore in the five months to May.