Bangladesh : Bottled soybean oil crisis persists, loose oil prices surge
Consumers in Dhaka and Chattogram face a bottled soybean oil shortage despite increased imports. Loose oil prices have surged, exceeding bottled oil rates. Traders blame limited supply, while major refiners claim increased production. Delays in Argentine shipments contributed to the crisis, but recent arrivals are expected to stabilize the market. The government cut VAT to control prices.
With the holy month of Ramadan knocking at the door, consumers have begun purchasing essential items, but bottled soybean oil remains largely unavailable in grocery stores.
During visits to multiple markets in Dhaka and Chattogram on Friday, bottled soybean oil was found to be nearly absent, especially the 5-litre variant. The crisis has been going on for the last few weeks, prompting the traders to take advantage and hike prices for loose oil.
According to the Trading Corporation of Bangladesh (TCB), the price of loose soybean oil has surged by Tk 15 to Tk 17 per liter in a month. It is now selling at Tk 185-190 per liter, which is higher by Tk 28 to Tk 33 than the government-fixed price.
The loose oil price has even surpassed that of bottled oil, which is set at Tk 175 per liter, with a five-liter bottle priced at Tk 852. However, some retailers, who still have bottles in their stock, are charging additional prices.
Despite increased imports and stability in global edible oil prices, consumers in Bangladesh are not getting its benefits as they are being charged extra prices by the retailers.
Ariful Islam, a resident of Shewrapara in Dhaka, went to a supershop to have a five-liter bottle of soybean oil, after searching it at multiple neighborhood grocery stores. But he did not find it there either.
While talking to Prothom Alo, he said, “The shopkeepers say they receive limited supplies of bottled oil, and those sell out soon after arrival. Oil consumption rises in the month of fasting. We hear about increased imports, but do not find them in the market.”
According to the Bangladesh Trade and Tariff Commission (BTTC), the annual edible oil demand in Bangladesh stands at 2.2 million tonnes, while local production stands at 250,000 tonnes only. The remaining demand is met through imports, mainly of palm and soybean oil. Usually, families prefer bottled soybean oil over the loose one.
Following media reports on the bottled oil crisis, the Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association issued a press release on 16 February, saying its affiliated entities are supplying more edible oil than usual marking the month of Ramadan.
The association dismissed concerns of a shortage and attributed any supply disruptions to stockpiling by some unscrupulous traders. It, however, assured that the crisis would ease soon, as unrefined soybean and palm oil prices remained stable in the international market.
The statement also noted that major edible oil producers – City Group, Meghna Group, TK Group, and Bangladesh Edible Oil Limited – imported more oil than required, with fresh supplies expected to enter the market within a week to ten days.
Despite these assurances, a crisis of bottled oil persists in the market, while the price of loose oil is rising. Faridul Haque, a retailer at Bahaddarhat market in Chattogram, said they are receiving a supply of only two cartons against an order of 20 cartons. “If supply normalises, the market will stabilise.”
Imports rise
According to the Tariff Commission, the monthly demand for soybean oil is around 87,000 tonnes, and it rises during the month of Ramadan.
In January, Bangladesh imported a record 117,000 tonnes of soybean oil, the highest in six years. Also, a total of 300,000 tonnes of soybean seeds, capable of producing 45,000 tonnes of oil, were imported.
However, imports were significantly lower in the first three weeks of February, with only 25,000 tonnes arriving in one shipment. Until 26 February, total imports stood at 57,000 tonnes, with another 130,000 tonnes expected to arrive soon.
The news of extra imports has already led to a Tk 4-5 per liter drop in wholesale prices in Chattogram.
When asked about the issue, Mustafa Haider, director of TK Group, said shipments scheduled for early February were delayed due to issues in Argentine ports. The tankers started arriving in the last week of February, and the oil is now being unloaded and marketed. There should be no crisis now.
Last year, Bangladesh imported 120,000 tonnes of soybean oil during January and February (until 26). This year, imports have risen to 174,000 tonnes during the same period. Four major importers – TK Group, City Group, Meghna Group of Industries (MGI), and Bangladesh Edible Oil Limited – have increased their imports.
Earlier, to control edible oil prices, the government reduced the value-added tax (VAT) in November.
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Source : Prothomalo English
