The edible oil market has again turned dicey and volatile. Now the consumers are once again facing an artificial crisis of edible oils, especially soybean and palm oils, in the retail market. Without prior warning from the dealers, the indispensable kitchen items have virtually vanished from the market. The next Ramadan (the Islamic holy month of fasting) is about three months away (to commence at the end of February or on the first day of March in 2025).
So, driving up edible oil price months ahead of the Ramadan does not seem logical. But some market observers suspect that it is the refiners of soybean oil who are behind this acute supply shortage of soybean oil in the kitchen market. Going by some edible oil dealers' complaints as reported in the media, they are not getting the required supply of soybean oil from the millers. As a knock-on effect, the trickle that is flowing to the retailers from the dealers is either being stockpiled or sold (by the retailers) to their dedicated customers in small amounts. The grocers in the different kitchen markets including Karwan Bazar in the city are reportedly experiencing severe supply crunch of oils. In some areas of the capital city, two-and-three-litre bottles (of soybean) are out of market, not to speak of the five-litre ones. In some cases, the grocers are selling loose soybean oil to the customers and, of course, they are selling it at a higher than the fixed market price. Due to the crisis of soybean and palm oils in the market, other brands of edible oil like sunflower or rice bran oil, which are available at the grocers, are being bought by those who can afford those. Now, what options are left to the low-income customers, when even the price of palm oil increased? But who cares?
The big businesses-millers, importers or wholesalers, etc.-will lose no opportunity to fleece the common consumers to make profit and, in the present case, it is superprofit. One might recall at this point that the home ministry recently warned of a possible supply crunch of edible oils during the upcoming holy month of Ramadan and recommended keeping an adequate stock of edible oils to ward off any such crisis. In this connection, the ministry also noted that syndicates of importers, refiners and wholesalers often put pressure on the government so the oil price could be hiked. This time, too, the millers have been repeatedly urging the government to raise edible oil price. To justify their demand, the oil merchants have come up with the argument of price hike of edible oils in the world market. Against this backdrop, the home ministry suggested that the commerce ministry and all the divisional commissioners were on the alert for any eventuality so any attempt at hoarding edible oils and other essential commodities by dishonest traders could be sternly dealt with. The Directorate of National Consumers Right Protection and mobile courts would mount strict monitoring to take necessary punitive measures against those found stockpiling the essential commodities to make excessive profit by holding the common people hostage.
Notably, the association of refiners and producers of edible oils, had on several occasions wrote to the commerce ministry to upwardly revise the prices of some oils including soybean because some ingredients used in their production have become pricier. As a result, the production cost of the edible oils has gone up. The ministry concerned is yet to respond to their appeal positively. So, it is hardly surprising that the refiners, importers and manufacturers of edible oils would be doing what they have been doing all along.
Use any excuse, reasonable or not, to escalate the prices of oils. And they have been doing it with impunity. Mention may be made here of the fact that in a bid to reduce the prices of oils, the National Board of Revenue (NBR) had on November 19, reduced the Value-Added Tax (VAT) on the import of soybean oil from 10 per cent to 5.0 per cent. Earlier, on October 17, a 15 per cent tax exemption was granted at the local production level and 5.0 per cent tax exemption at the local trading level in the supply of both refined and non-refined soybean and palm oils. But as in the past, tax exemptions to oil businesses never reflected in the market for umpteen excuses. Small wonder that the common consumers did never benefit from the concessions the government made to the businesses from time to time. On the contrary, the sole beneficiaries of the government measures were the businesses. But they were never satisfied as they approached with fresh demands, as in the present case, to further increase the prices of edible oils. The supply of edible oils in the local market has reduced, the importers and marketers of the oils admit. But due to price hike of oils in the international market, the volume of their oil import has declined by 20 per cent as, going by the international market, the per litre price of edible oil has gone up by Tk10 to Tk.13. So, should one be surprised that they are supplying reduced amount of refined oils to the market? Then, what is the way out of this new problem? Well, they have already told the government about the panacea: Just go for another round of price hike of edible oils. It's so simple! The businesses will have their pound of flesh. The common people have no place in their calculations.
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