Cooking oil prices fall on ample supply
Cooking oil prices have started to fall in the local market due to ample supply amid a price decline on international markets.
Prices of different brands have dropped 8-10 percent in the last couple of days as importers and refiners cut prices.
“We have brought down prices by Tk 8 a litre to Tk 94. Retailers now should sell it at Tk 100 a litre,” said Saiful Alam Masud, chairman and managing director of S Alam Group. The Rupchanda brand marketed by Bangladesh Edible Oil Ltd is now being sold at Tk 97 a litre at mill gate from more than Tk 100 a week ago.
Prices of other brands such as Pusti of TK Group, Teer of City Group and Fresh of Meghna Group have also gone down in the last few days. Consumers are yet to benefit fully from the fall in prices as some retailers are still selling old stock.
Edible oil, both soybean and palm, is used widely in Bangladesh and fluctuations in its prices affect crores of consumers.
The country needs 16 lakh tonnes of cooking oil a year -- around 70 percent of it is palm oil and the rest is soybean and other oil, according to Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association.
Bangladesh imports palm oil mainly from Malaysia and Indonesia.
Palm oil has become very cheap as the prices have fallen to the 2009 levels. The price, including freight charges, (also known as C&F price) went down 10 percent to $665 a tonne in the last one month, said Mizanur Rahman, a director of Nurjahan Group. The price was $730 a tonne a month ago.
When palm oil prices have been plummeting for several months, soybean market is volatile. The C&F price of Argentina's soybean oil was $855 a tonne yesterday, while November's highest price was $770, he said.
“I think this (soybean) price hike is temporary and it will go down soon,” Rahman said.
Akter Hossain, a retail trader in the city's Kathalbagan area, said prices of edible oil have been falling for the last few days.
He said the prices of a five-litre bottle of Rupchanda brand have dropped by Tk 50-Tk 60 to Tk 500 now. The prices of one-litre bottle of different brands have been reset at Tk 105-Tk 107 from Tk 115-Tk 117 a week ago.
“I am yet to take the new products at reduced prices as I have an old stock,” Hossain said, adding that consumers are yet to benefit fully from the price cuts.
Mustafizur Rahman, executive director of Centre for Policy Dialogue, said consumers often do not get the benefit of a price fall as the market is dominated by a few importers.
“The decline is not reflected in the retail market due to intermediaries and middlemen,” he said.
Rahman said the government can bring more players into the business to break monopoly of a few importers.
Ahsan H Mansur, executive director of Policy Research Institute, said consumers do not always get the price benefits due to their trust in particular brands.
“Many consumers are not price-sensitive, rather they prefer the brands they like irrespective of their prices,” said Mansur, also a former official of International Monetary Fund.