People buying soybean oil, lentil at exorbitant prices from market

A large quantity of soybean oil and lentil is becoming date-expired and stale in the warehouses of Trading Corporation of Bangladesh (TCB) at a time when people are buying these essential items from the market at an exorbitant price, sources said.

Per litre bottled soybean oil in the local market is being sold for between Tk 115 and Tk 120, while per kilogram (kg) lentil between Tk 75 and Tk 125.

According to a TCB note, some 213,258 litres of bottled soybean oil, stored in the TCB warehouses in 2012, will become date-expired in February this year. Besides, 3862 tonnes of lentil, imported from Turkey, Canada and Egypt in 2012, is lying stored in the warehouses in the last 14 months resulting in their being attacked by fungus.

The stored lentils have been fumigated thrice so far to protect them from being attacked by pests. "Lentil can be fumigated up to thrice in its 'lifetime'. Their quality goes down if fumigated further."

TCB chairman Sarwar Jahan Talukdar told the FE Thursday that the lentil and soybean oil remain stored for long, as dealers show reluctance to collect those at prices fixed by the government.

"They want to get the essential items at lower prices and make large profits. They find the TCB-fixed prices to be higher and do not collect the products causing their long stay in a stockpiled condition," he said.

Mr Talukdar said TCB collects essential items to sell those when their prices go abnormally up in the market. "During the last three years, prices of none of the essentials have gone up abnormally," he added.

He said prices of the essential items would be lowered soon for the dealers, so that they became interested in those and took delivery of the products from the warehouses considering earning a good profit.

The TCB recently sent a proposal to the ministry of commerce (MoC) for reduction of the prices of lentil and soybean oil at consumer level, so that the dealers could make considerable profits.

Commerce Secretary Mahbub Ahmed told the FE Thursday that he had been informed verbally about the state of essential items in the TCB warehouses.

"Decision will be taken on lowering their prices after getting a written proposal from the TCB," he said.

According to the TCB note, the public exchequer will have to arrange subsidies of Tk 8.45 million if some 500 dealers withdraw 300,000 litres of soybean oil, and 250,000 kilograms of lentil, imported from Turkey, Canada and Egypt, and 200,000 kilograms of lentil imported from Nepal.

As the TCB sells commodities at subsidised rate, the organisation incurs huge financial losses every year. In the last three fiscal years (FYs), the government had to provide over Tk 2.0 billion as subsidy to  TCB.

In FY 2012-13, the government provided TCB Tk 586.89 million. It gave the corporation Tk 775.88 million in FY 2011-12 , and Tk 690.80 million in FY 2010-11 against the losses it incurred due to selling the essentials at subsidised rates.