Edible oil: Prices drop in global markets, not at home
Even though prices of loose palm and soybean oil have dropped in wholesale markets, consumers are not being able to reap the benefits as retailers are still selling those at the government-fixed prices.
Yesterday, a litre of palm oil was being sold at Tk 12 less than the price fixed by the government at the retail level and soybean oil at Tk 5 less, said traders at Chattogram's Khatunganj and Dhaka's Moulvibazar -- the country's two main wholesale markets.
They also said the drop was due to the price decline in the international market and that the government should fix its retail rates accordingly.
Commerce Minister Tipu Munshi recently said the edible oil prices will come down soon.
Importers, however, are against the reduction. They say they have imported the products, now in the market, at higher prices.
In the wholesale market, loose palm oil is now being sold at Tk 156-158 and soybean oil at Tk 172-174, said traders, adding that the two products' prices have been falling in the international market for the past month.
Meanwhile, the government fixed the wholesale price of loose palm oil at Tk 170 per litre, and loose soybean oil at Tk 178 per litre. The retail price is Tk 2 higher per litre than those.
According to the Trading Corporation of Bangladesh, loose palm oil was sold at Tk 175-182 per litre, loose soybean oil at Tk 182 to Tk 190, and bottled soybean oil at Tk 195 to 200 in retail markets on Thursday.
Speaking to The Daily Star, Mohiuddin, owner of Shah Amanat Traders of Khatunganj wholesale market, said, "Loose palm oil is being sold at around Tk 6,500 and loose soybean oil at around Tk 7100 per maund [40.9 litres] in wholesale markets."
He said the prices need to be adjusted in the domestic market in line with those in the international one.
According to Market Insider, a facts and statistics data portal, palm oil was sold at 7,757 Malaysian Ringgit (MR) per tonne in the international market on April 27. It was sold at 6,754 MR per tonne on June 3 -- a drop of MR 1,003 per tonne.
The decrease in palm oil prices occurred when Indonesia, the world's top palm oil producer, lifted its oil export ban on May 23.
Prices of crude soybean oil declined from $1,880 per tonne on April 27 to $1,790 on June 3.
Rafiqul Alam, a private job holder who lives in the capital's Mirpur, said that when the price of soybean oil went up, traders said it will go down (in the domestic market) if it decreases in the international market.
"It has now gone down in the global market. Yet, businesspeople are saying it not possible for them to reduce prices at the moment. Why? Who will answer this question?"
He added that while the prices of essentials are increasing every week, people's incomes are not. "It is a difficult time for those in the lower-income bracket."
Meanwhile, Rafiqul Islam, owner of Bismillah Store in the port city's Hamzarbagh Kitchen Market, said, "We have to sell cooking oil at the previous rate as we bought them [the stocks of oil] a week ago."
On Thursday, the commerce minister said, "Like the international market, prices will drop in the local markets too. We will take a decision [in this regard] soon after reviewing the import data of May in around a week."
Taslim Shahriar, senior assistant general manager of Meghna Group of Industries, said the oil purchased two months ago are now coming into the country.
He said, "If you purchase now, the product will come to the country in August. The prices may be reduced only by then."
Shafiul Ather Taslim, director of TK Group's finance and operations' wing, said, "Considering the overall situation, we sent a letter to the commerce ministry and the tariff commission last Wednesday, saying that the prices need to be adjusted in 15 days."
SM Nazer Hossain, vice-president of Consumer Association of Bangladesh, said that although there is a law, the prices decrease and increase according to the businessmen's will.
He said prices in the international market have come down but not at the retail level in Bangladesh due to the government's dependency on traders.
"When prices in the international market go up, they automatically rise in the retail market even before the government can adjust them. But when they go down [in the international market], it takes long for them to come down [in the country's retail market]."
According to the National Board of Revenue, six refiners imported more than 15.11 lakh tonnes of palm oil and soybean oil worth Tk 18,182 crore in five months till May this year through the Chattogram and Mongla ports.
Some 78,557 tonnes of palm oil worth Tk 1,116.65 crore (with 5 percent import tax) and 57,557 tonnes of soybean oil worthTk 957.29 crore were imported last May, according to the NBR data.