Commerce Adviser Hossain Zillur Rahman said Wednesday prices of edible oil would not increase during the holy month of Ramadan as the domestic market is adequately supplied amid falling rates in global market.
"The good news is that the prices of the edible oil will remain stable during the month of Ramadan," Zillur told reporters after a meeting with the country's top soybean and palm oil importers and refiners.
"There will be no increase of edible oil prices both at the retail and wholesale levels. The prices may fall once the internal market declines further," he said.
His assurance came weeks before the start of the Muslim holy month of Ramadan. The prices of edible oil generally spike during the month, as Muslims break their fast with spicy food cooked with edible oil.
The government called the meeting to calm down fears of the people who have already been worst hit by soaring food prices since last year. Representatives of the Bangladesh Rifles (BDR), which monitor the prices, were present.
Zillur said he was assured by the top importers that the prices would see no hike, as there is no disruption in the supply chain, while the prices in global markets have started to cool down.
President of Bangladesh Edible Oil Refiners Association MA Rouf Chowdhury said the top refiners have some 200,000 tonnes edible oil in the stock while ships carrying another 50,000 tonnes are arriving at the port very soon.
The demand for the edible oil during the Ramadan is around 150,000 tonnes, he said, ruling out any chance for price spike during the period.
On Wednesday edible oil-mainly soybean- was selling at Tk 116-118 a kilogram in the local market, and the importers said the price range would maintain the same trend during the Ramadan.
The prices of crude soybean and palm have been falling in the international market over the past few weeks mainly because of expected good yield of soybean in the United States, the world's largest producer.
Analysts said the end of strike by farmers in Argentina and a good harvest of soybean in India, the largest of edible oil consumer in the world, have also contributed to the sharp price decline in the global market.
Crude and palm oil traded at $1000 and $1205 a tonne on Wednesday-down by at least $100 a tonne from a week back.
Fakhrul Alam, representative of Malaysia Palm Oil Council, the biggest exporter of palm oil in the world, also forecast that the prices in the local market would come down in the coming months.
"We are not sure whether the current prices of crude oil in the international market will be stable or not. It might fall as soon as the US starts soybean harvest in September," he said.
The commerce adviser said despite assurance by the refiners, government agencies including city corporations and BDR would open subsidised food outlets to sell cheap food during the holy month.
It would boost supply and keep the prices down, he added.
Rouf Chowdhury blamed the retailers for the 'unjustified' high prices of edible oil in the local market. "There is a huge gap between the prices charged by the refiners and the retailers," he said.
He said: "We will give an action plan to the government within 15 days to monitor prices in the local market and help reduce the gap between the prices at the mill gate and retail levels."
Zillur also promised a transparent monitoring system to curb price gap between mill gate and retail level.
"We are really concerned over the high prices of edible oil at retail level and we will set a logical price gap between mill gate and retail level. We will have a transparent monitoring system for this," he added.
Bangladesh last year consumed around 1.3 million tonnes, more than 90 per cent of which is imported. Palm oil, which is slightly cheaper than soybean, makes up 60 per cent of the import.
Refiners said the country imported 700,000 tonnes of oil in the last seven months. Some 520,000 tonnes of the import were palm oil.
