TCB plans to buy 240m litres of palm oil from Malaysia

Due to lack of local suppliers, Trading Corporation of Bangladesh (TCB) has planned to purchase 240 million litres of palm oil from Malaysia under government-to-government (G2G) arrangement.
The plan is to import 20 million litres per month to sell it with other essential commodities at subsidised rate to 10 million low-income card-holder families, sources said.
The state trading agency is currently conducting its sales drive of items like soybean, lentil, and sugar. Moreover, it sells chickpeas and dates at reasonable rates during the holy month of Ramadan while onion and potato during lean periods or to meet emergency needs.

Officials said the TCB has already requested the commerce ministry to take necessary steps in this regard.
"We're now working on the issue," a senior official at the ministry said.
The TCB needs around 20 million litres of soybean oil per month and it procures it from the local suppliers to meet the demand for the poor families.
It considered the import plan out of the fear that procuring the edible oil from the local suppliers might cause a supply shortage in the domestic market, said an official.
It would also be possible to ensure uninterrupted supply of edible oil in the market and keep prices under control.
According to a TCB document, currently open bids are invited to procure these products from both local and international sources. However, due to a lack of genuine suppliers, it is failing to buy soybean, palm Oil and rice bran oil.
The TCB claimed that the refined palm oil as per TCB specifications can be easily purchased from Malaysia under G2G arrangement or direct procurement method (DPM) at relatively a lower cost.
In this case, the domestic market supply chain will remain uninterrupted and prices are expected to remain stable.
The TCB cannot procure essentials from domestic and international sources despite its hectic search for sufficient suppliers/lower bidders, according to a previous document of the TCB.
In many cases, some genuine suppliers are proposing higher than reasonable rates.
Domestic suppliers are not willing to bid as the rate fixed by the government is much lower than the current market rates, says a source with good knowledge about the trade trick.
The mobilisation of such commodities for the 10 million cardholders often faces disruptions as it sometimes becomes difficult to procure the required quantity of the items.
The TCB has not been selling sugar for the last couple of months due to a shortage of the sweetener. It is, however, becoming desperate to procure sugar for the upcoming Ramadan drive. TCB officials are expecting to be able to supply sugar during the month.
To procure adequate essentials, including edible oil, from abroad, the TCB recently requested the commerce ministry for steps to activate memoranda of understanding (MoUs) with four different countries -Canada, Russia, India and Nepal.
A TCB document suggested that the MoUs would be activated with an eye to import all key items from the international market.
Items like edible oil, lentil and sugar will be available at affordable prices if the MoUs are executed, it reads.
The TCB signed the MoUs with Canada, India, Russia and Nepal in March 2011, November 2018, March 2024 and March 2020 respectively.
Meanwhile, an estimated 20-million litres of edible oil, 20,000 tonnes of lentils and 10,000 tonnes of sugar are required per month.
The government is going to buy some commodities in advance in order to operate the TCB sales drive for the upcoming Ramadan, according to a source.
As part of the move, the commerce ministry plans to purchase chickpea and dates from the global market.
The TCB fears that the supply of one or two items may be disrupted during Ramadan if the government does not start the procurement drive by now.
Currently, the TCB is selling 5.0 kg of rice (supplied by the food department), 2.0 kg of lentil and 2.0 litres of soybean oil at subsidised rates, with 30-32 per cent of the country's population benefiting from the programme.
These items are bought every month as per annual procurement plan following the Public Procurement Act 2006 and the Public Procurement Rules 2008.
The TCB chairman could not be contacted for comment despite repeated attempts.
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