Edible oils much dearer than production costs

Millers are selling edible oils at much higher rates than production costs, according to a government study on the price rises and possible remedies.    
The study report recommends that the ministry of commerce (MoC) take steps to bring the jacked-up edible oil prices down, sources said.
Bangladesh Tariff Commission (BTC) carried out the study recently, taking into account the import statistics of last September, import prices of crude oil, expenses related to refining, bottling and distribution, and profits of millers, distributors and retailers.
The study found that after calculating all the expenses the maximum retail price of per- litre soybean oil comes to Tk 98.20.
But, according to the Trading Corporation of Bangladesh (TCB), soybean oil was selling Wednesday at prices ranging between Tk 112 and Tk 116 a litre in different markets at home.
On the other hand, the maximum retail costs of per-litre unpacked palm oil stands at Tk 62.20.  But the shopkeepers charge consumers between Tk 65 and Tk 73.
According to the report some 28,900 tonnes of soybean oil was imported in September. Fresh letters of credit (LCs) were opened for importing 16,000 tonnes more. And some 18,135 tonnes of refined oils were preserved at millers' level.
In the same month, 104,662 tonnes of refined palm oil was imported while fresh LCs were opened for importing 20,407 tonnes of crude.
The government agency report said the stock of soybean and palm oils as well as their imports in pipeline was satisfactory during the month.
However, despite the sound supply chain, the market showed wayward trends. "Refined soybean and palm oils are being sold on the local market at a much higher than logical level."
BTC officials hold the view that millers raise prices of edible oils unilaterally in breach of 'The Essential Commodities Distribution and Distributor Recruitment Order-2011'.
According to the order, a national committee headed by the BTC chairman, in consultation with importers, millers and trade bodies concerned, will re-fix the prices of essential commodities.
However, the edible oil refiners are not going by the rules, the report observed. Even the millers are not cooperating with the price-monitoring cell of the BTC by way of providing necessary information.
A senior MoF official told the FE Wednesday that the ministry will soon sit with the importers, millers, distributors and retailers to discuss the price hike of essential commodities and find the ways to keep the prices under control.
 "Yes, we noticed the excessive profit making by the edible oil sellers and will give a strong message to them in next week's meeting," the official added.
 

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