Cooking gets yet costlier as edible-oil market became volatile in last two days with prices overriding set official rates, and refiners now bid for a fresh hike.
Loose soybean-oil prices shot up to Tk 171 to Tk 175 a litre (Tk 185-Tk 190 a kg; 1 litre soybean= nearly 917 grammes) while palm oil to Tk 160-165 a litre on Sunday against the government-fixed MRPs of Tk 143 and 133 respectively.
Market sources say the bottled soybean-oil price was still Tk 168 a litre officially but most of groceries had lack of both one-litre and five-litre jars on the day, putting consumers in great difficulties.
Groceries got new half-litre bottles of Teer, Pushti and Rupchanda brands pricing Tk 88-Tk 90.
Few grocers have got Ruchanda five-litre bottle pricing Tk 840 from Tk 800 previously.
Juel Rana, a grocer in Dhaka's West Dhanmondi, said many of edible- oil wholesalers were removing oil from five-litre jars bought earlier at Tk 740-750 and put those into loose oil drums.
"The bottled oil was selling at Tk 171-175 a litre or Tk 185-190 a kg in loose form," he says about tricks of the trade.
"The wholesalers are telling us that the price has been increasing for the beginning of war between Russia and Ukraine," Mr Rana adds.
Golam Rahman, a grocer in Rayer Bazar area, said he had only ten jars of one-litre and four pieces of five-litre jars left in the shelf as refining companies stopped supplying new products amid possibility of further price review.
He said many oil traders, who also sell loose oil apart from the branded ones, collected five-litre soybean-oil jars from nearby groceries in good numbers.
"Selling it in the loose form will be a profit-making venture for them as price of soybean oil will be highest Tk 160 a litre considering the five-litre jar price of Tk 800 when price of loose soybean has been increased to Tk 170 a litre by the traders," he adds.
Al Mamun Parvez, the proprietor of Zareen Banijjaloy at Sadeq Khan Agricultural Market in Rayerbazar-Beribadh area, said loose oil wholesale price had been increased to Tk 180 a kg in last two days by companies, which was Tk 168 a kg two-three days back.
He says new sale orders (DOs) have almost been stopped by major refiners, which pushed up prices significantly at Moulovibazar wholesale in the city.
Contacted, president of Bangladesh Paikary Vojjaya Tel Babosayee Samity, the association of edible-oil wholesalers, Haji Golam Mawla also echoed that of Mr Parvez that new SOs are not being issued.
He claimed traders in Moulovibazar were selling loose soybean at Tk 6010 a maund (Tk 147 a litre) now which could be increased further amid getting new SOs.
A senior official at a leading refining company told the FE that they had earlier on Feb 03 proposed to set soybean-oil price at Tk 186 a litre but later again gave a reviewed proposal to make it Tk 180 a litre from March 1.
He notes that global soybean-oil prices hit an all-time high at US $ 1720 a tonne in later part of February.
"We have given the latest proposal to set MRP of soybean oil Tk 180 based on the products imported at $ 1400 a tonne by the refiners in January," he says.
He informed that the government is realising VAT at 15 per cent at import stage, 15 per cent at production stage and 5.0 per cent in trading, which has been fueling up prices further.
"This three-tier VAT started in 2019 when we imported soybean oil even at $ 800 a tonne," he says.
And now, when the prices of palm oil and soybean oil have increased above $ 1500 a tonne as well as Bangladeshi currency has also lost its value to the US dollar by a good margin, the VAT rates are still same, he points out.
Director of the Directorate of National Consumer Rights Protection (DNCRP) Monjur Mohammad Shariar told the FE a total of six teams had been monitoring the market since Thursday.
"We fined two wholesalers at Karwan Bazar Tk 0.1 million each on Sunday finding illogical difference between their purchasing cost and selling rates," he says.
Consumers Association of Bangladesh vice-president S M Nazer Hossain told the FE that loose market monitoring hardly could restrain unscrupulous traders from jacking up prices at their wish.
He said the government is also not taking the price hike of essentials seriously as it is still realising VAT by higher margins from import-based essentials like edible oils whose global prices hit an all-time high in recent months.
"The government should remove all kinds of VAT and taxes from the import-based food items immediately to prevent further volatility in the essential markets," he says.
Meanwhile, local oil refiners have proposed to cut the maximum retail price (MRP) of bottled soybean oil by Tk 6.0 a litre from its previous proposal.
However, their proposed reduction still remains Tk 12 per-littre higher than the rate fixed at Tk 168 per litre by the government on February 06, 2022.
Recently, the Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association (BVORVMA) had requested the commerce ministry to raise the MRP of bottled soybean oil to Tk 186 per litre (MRP) from existing Tk 168, which was approved by the government on February 06, from the previous rate of Tk 160 a litre.
On February 27, 2022, the BVORVMA urged the ministry to take necessary steps regarding the price-cut proposal.
The group of millers mentioned in the proposal that the new rates would be effective from March 01, 2022.
The MRP of a five-litre soybean-oil jar has been proposed Tk 870 while the BVORVMA has proposed the MRP of loose soybean oil Tk 157 per litre and the MRP of super palm oil Tk 150 per litre.
At this moment, the members of BVORVMA are now in dilemma over opening letter of credit (LCs) for importing edibles, and about the LC issue, the association has sought direction from the government site.
The prices of edible oils have increased unexpectedly on the global market. Price of per-tonne soybean and palm oil increased to US$1700-1725 and U$1690-1710 respectively.
The BVORVMA thinks that if it is imported at that increased price from the international market, the price of edible will increase proportionately on the local market.
The soybean-oil price increased several times last year due to increase in its price on the global market, following economic disruptions caused by the coronavirus pandemic.
Bangladesh annually imports 2.2 million to 2.6 million tonnes of edible oils, including 0.7 million to 0.8 million tonnes of soybean oil, and 1.4 million to 1.6 million tonnes of palm oil. More than 95 per cent of the local demand is met through import.
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