Home ministry senses volatility in edible oil prices in Ramadan

The home ministry has sounded an alarm about a possible crisis of edible oils during the holy month of Ramadan in March next, and suggested ensuring adequate stock of the key essential.
It also recommended the Ministry of Commerce (MoC) and all divisional commissioners to prepare for facing the situation likely to emerge then by taking stern action against hoarders and profit mongers with the aid of mobile courts and the Directorate of National Consumer Rights Protection (DNCRP).
According to a report of the Ministry of Home Affairs, a copy of which was obtained by the FE, different syndicates of producers, importers and dealers hike the prices of edible oil by putting pressure on the government. They also control the market as per their wish.
The ministry suggested assessing the district-wise demand of soybean oil, including the volume of purchasing quantity of all companies, at the district level to identify the causes of any shortage.
Besides increasing imports to ensure adequate stock, the ministry also emphasised on domestic production of mustard oil which can be increased while the use of other cooking oil such as mustard, olive, sunflower and coconut oil can be increased.
It recommended supplying daily produced edible oil as per area-wise demand, while local oil refiners can be brought under surveillance to see whether they are maintaining production as per their respective capacities.
According to the commerce ministry, Bangladesh's annual demand for edible oil is estimated to be 2.4-2.9 million tonnes, with over 95 per cent met through imports.
In FY 2023-24, the country imported around 2.3 million tonnes of non-refined edible oil.
On April 18 last, the refiners raised soybean oil price by Tk 2.0-4.0 a litre. The price of bottled soybean oil has been set at Tk 167 a litre from Tk 163 earlier. The retail price of loose soybean oil has been set at Tk 147 per litre, marking a surge of Tk 2.0 per litre.
The retail price of the five-litre bottled soybean oil has been raised to Tk 818 from Tk 800. The maximum price of palm oil has been fixed at Tk 135 a litre.
But, Prices of edible oils, including loose soybean and palm oil, have zoomed up further by Tk 5.0-6.0 a litre in the market, battering commoners amid spiraling prices of other commodities.
The rate of loose soybean has increased to Tk 165-166 a litre and super palm oil to Tk 158-162 a litre.
The prices have witnessed a Tk 10.0-12 hike a litre in the last three weeks since the VAT cut by the government, said vendors.
Asked, consumers and retail traders fear that edible oil especially soybean oil may destabilise the market and it may sell at higher prices, irritating the consumers.
During a visit to different retail markets, traders said that earlier they used to buy at lower prices and sell at the price set by the government.
"Now, we have to buy soybean oil at higher prices. But it has to be sold at the government-set prices," said a trader.
Besides, the dealers of the companies have already reduced the supplies to the market, showing signs of creating an artificial crisis before Ramadan, alleged the traders.
They also alleged that they are not getting enough supply of bottled soybean as per their requirement.
The government has reduced value-added tax (VAT) on import, processing and trading of soybean and palm oils to lower their prices, following the demands of refiners and importers. The finance ministry announced VAT exemption at import and production stages of edible oils in two separate notifications on October 17 last.
VAT on local production and trading of soybean and palm oils has been exempted while VAT on refined and crude soybean and palm oils in import stage is also reduced from 15 per cent to 10 per cent.
The facilities remain effective until December 15, 2024.
The government has taken the decision following the requests from the refiners regarding the hike in global oil prices.
The Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association apprised the commerce ministry that the prices of soybean and palm oil are rising in the international market and demanded a 14.8-percent increase in the prices of crude soybean oil and an 18.68-percent rise in the prices of palm oil to cope with the fueling cost. Commerce Secretary Md. Selim Uddin could not be contacted over phone despite several attempts.
Consumers Association of Bangladesh (CAB) vice-president SM Nazer Hossain said that despite the government's efforts to respond to the demands and urgency raised by refiners, they (refiners) are showing a different face.
While the government has accommodated their needs, the refiners are engaging in practices that contradict the intended outcomes, failing to pass the benefits on to the consumers. He urged the commerce ministry to look into the matter seriously and put pressure on the refiners to reduce the prices of edible oils in loose form to give commoners some relief.

[email protected]