Govt fixes edible oil price to tame volatility
The government yesterday fixed edible oil prices to tame the volatility in the domestic market and curb price manipulation by a section of unscrupulous traders.
The new price came into effect immediately. The price of loose soybean oil was fixed at Tk 115 per litre at the retail level, said Commerce Minister Tipu Munshi after a meeting with major refiners, importers, traders and wholesalers at the secretariat in Dhaka.
The move came as loose soybean oil was selling at Tk 116-Tk 120 per litre at the retail level in the capital, up 3.5 per cent from Tk 112-Tk 116 a month ago.
The price of non-branded soybean oil averaged Tk 87 per litre a year ago, meaning it surged 36 per cent now compared to a year earlier, market prices data compiled by state-run Trading Corporation of Bangladesh showed.
Retail prices of branded soybean oil advanced 29 per cent year-on-year to Tk 130-Tk 140 per litre yesterday, the average price of which is equal to the government-fixed rate.
The government set the price of five-litre branded soybean oil at Tk 630, which was higher than the average price of Tk 610. The price of super palm oil was set at Tk 104 per litre.
"The market will be stable if all mills comply with the decision and keep the supply smooth," said Abul Hashem, general secretary of the Bangladesh Edible Oil Wholesalers Association.
Many wholesalers have bought edible oil from refiners at the prices that are higher than the 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 consumer level, Tk 610 at the distributor level, and Tk 590 at the mill gate.
The government set the price 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 oil annually, and it meets 90 per cent of the demand through imports, according to Mahmodul Hasan, assistant chief of the Bangladesh Trade and Tariff Commission, while presenting a paper at the meeting.
The country spent Tk 12,280 crore to import edible oil in the fiscal year of 2019-20, Bangladesh Bank data 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 price of the key cooking ingredient in Bangladesh.
The price of edible oil will be reviewed after 15 days as practised by the National Price Fixing Committee on Essential Commodities under the commerce ministry.
Mostafa Kamal, chairman and managing director of Meghna Group of Industries, an edible oil processor, said the stock of edible oil was lower.
There were production challenges in major markets such as Argentina and Brazil, while China, a major importer, is buying a lot of cooking oil from international markets, he said.
Kamal urged the government for a quick release of imported goods from ports and assured that they would import an adequate quantity of edible oil to meet the local demand.
Abdur Rashid, a wholesaler in Chattogram's Khatunganj, one of the main wholesale markets for commodities, said the demand for cooking oil was increasing ahead of the fasting month of Ramadan.
"But the supply is not increasing in line with the growing demand," he said, adding that wholesalers have to wait for days to get the delivery of edible oil.
"If anyone wants to get the delivery immediately, they must pay an extra Tk 100-120 for every delivery order," he said, adding that the delivery orders of soybean oil were selling at Tk 4,460- Tk 4,480 per maund.
Anower Hossen, a retailer in Hamjarbag Bazar in the port city, said fixing the price will not control the oil market if the supply does not get a boost.
"To keep the prices and the supply normal, the government should beef up monitoring from mill gates to retail markets."
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