Edible oil prices shoot through roof

In a bizarre phenomenon yesterday, prices of edible oils shot up by Tk 10 a litre within hours in the capital due to an acute shortage of the essential commodity on wholesale markets, which is likely to have an immediate effect on the rest of the country.
On retail markets a litre of soybean oil was selling for Tk 90 to Tk 92 yesterday which had been Tk 80 to Tk 82 on Tuesday. On wholesale markets on Tuesday morning a kg of soybean oil was selling for Tk 76 to Tk 77 until it suddenly shot up to Tk 86 to Tk 87 at noon.
Oil is sold in kilograms in wholesale markets and in litres in retail markets.
A litre of palm oil was selling for Tk 86 to Tk 90 on retail markets in the capital yesterday, the price of which had been Tk 76 to Tk 78 a litre the day before.
An actual shortage of edible oil coupled with an artificial shortage created by some unscrupulous businessmen is responsible for such an unusual hike in edible oil prices, said oil traders. In the last few months, prices of edible oils shot up several times.
Due to the unusual and sudden rise in the price of soybean oil, shoppers at different kitchen markets yesterday were seen having heated exchanges with retailers.
Ratri Chowdhury, a grocery shopper in Purba Raja Bazar area of the capital, wanted to buy half a litre of soybean oil, when the retailer asked for Tk 46 for the amount of the essential commodity, she became infuriated.
While visiting Moulvibazar in Old Dhaka, the largest distribution market for edible oils in the country, The Daily Star found most of the retailers and small scale wholesalers, who had come to buy oils from there, returned empty-handed as the distributors were saying they were running short of oil stock.
Some distributors were charging buyers unusually high prices. Some buyers were purchasing a litre of soybean oil for Tk 84 even at the largest distribution market in the country, where all the edible oil wholesalers of the capital make their purchases, and which even supplies the essential commodity to different district and upazila level wholesalers.
A wholesaler in Karwan Bazar preferring anonymity told The Daily Star, "Due to pressures from different quarters, we are forced to keep the price of soybean oil between 86 taka and 87 taka, but after adding carrying cost and other related expenses we won't be able to make any profit from selling it for that price."
Azmat Ali, a salesman at Sayeed and Brothers in Moulvibazar, said, "We placed an order to an oil company for 1,800 litres of soybean oil on July 7, we also made an advance payment, but the company has yet to supply the oil."
A number of businessmen in Moulvibazar said although they paid oil companies months ago for edible oils, they are yet to receive the supply. Since they paid the oil companies from loans they had taken from banks, they will have to count interests in the meantime, they added. The interest rates on the wholesalers loans too will be added to the retail price of the commodity, shooting it up further, the wholesalers said.
They also alleged that some large scale distributors in Moulvibazar placed orders for humongous amounts of edible oils to producers and importers paying them in advance, and hoarding the supply adding an artificial pressure on the already real acute shortage of edible oils in the market. Those unscrupulous distributors are creating an artificial crisis in anticipation of an astronomical increase in demand for edible oils in the coming month of Ramadan, when they plan to release the hoarded oils in the market for shot up prices.
Normalising the edible oil market demands ensuring proper supply of oils through a large number of importers, said the wholesalers in Moulvibazar.
"But due to the ongoing drive against corruption, around 60 percent importers stopped importing," said an importer who claims that he also had stopped importing in fear of the government's wholesale drive.