Edible oil prices rise again

Edible oil prices have risen for a third time in two months, making it even more difficult for low-income groups to afford the essential cooking ingredient amidst the ongoing coronavirus pandemic.

"The retail price of edible oil has been raised by Tk 5 per litre," said Md Shafiul Ather Taslim, director for finance and operations at TK Group, a leading importer and processor of essential goods.

As such, local importers and processors hiked the retail price of branded soybean oil to Tk 144 from Tk 139 per litre while the cost of a five-litre bottle was set at Tk 685, up from Tk 660 not long ago.

Similarly, the price of loose soybean oil rose to Tk 122 per litre from Tk 117 while loose palm oil prices have been fixed at Tk 113 per litre, up from Tk 109 last month.

The new prices came into effect on April 25.

On April 19, the Vanaspati Manufacturers Association, an association of edible oil importers and manufacturers, sent a letter to the Bangladesh Trade and Tariff Commission to inform them of their decision to raise edible oil prices.

In the letter, they asked the commerce ministry to set the price of soybean oil at Tk 150 per litre due to rising prices in the international market. But considering the situation during Ramadan, the association fixed the retail price of branded soybean oil at Tk 144.

Munshi Shahabuddin Ahmed, chairman of the Bangladesh Trade and Tariff Commission, said they received the letter and forwarded it to the commerce ministry for its decision on the proposal.

However, he declined to speak further on the matter.

With the new prices, the cost of edible oil has soared for a third time in about two months, putting pressure on consumers who are already suffering from a loss of income amid the Covid-19 crisis.

The last time the government had raised edible oil prices was on March 15, before which the retail price of unpacked palm oil was Tk 104 per litre, unpacked soybean oil Tk 115 per litre, and canned soybean oil Tk 135 per litre while a five-litre bottle Tk 630. A private jobholder seeking anonymity said this increase in price would put him under more pressure.

"It has become difficult to make ends meet due to the skyrocketing prices of daily essentials during the lockdown and Ramadan," he said, adding that in such situations, a further price hike is just another blow.

Ghulam Rahman, president of the Consumers Association of Bangladesh, said the rise in oil prices would put ordinary consumers in more trouble under the current circumstances.

"So, the government should reduce or subsidise the import tax on edible oil to keep prices within the purchasing capacity of common people," he added.

The advance tax recently exempted by the National Board of Revenue (NBR) will not be effective in containing prices, according to Biswajit Saha, director of corporate and regulatory affairs at City Group, one of the country's biggest commodity importers and processors.

Refiners have been demanding the imposition of value added tax (VAT) on the import stage of the value chain rather than on production and distribution as it is not possible for distributors to maintain transaction records in line with the rules.

But since VAT is charged at all three stages, the burden increases for consumers, he said.

"So, removing the tax on imports would be helpful," Saha said.

According to revenue officials, the indirect tax was imposed to bring the sector under the tax net.

The City Group official went on to say that edible oil prices are unstable in the global market due to the coronavirus situation.

"We recently bought crude degummed soybean oil at $1,280 per tonne. At this price, our costing stands at Tk 162 per litre," he added.

The World Bank's data on commodity prices shows that the price of soybean oil has risen sharply in international markets over the past couple of months.

Soybean oil prices increased four per cent to $ 1,164 per tonne in March from $1,121 per tonne in February. In January, the price of soybean oil was $ 1,101 per tonne.