Bangladesh : Refiners press for edible oil price hike despite global fall
Local refiners have urged the government twice this month to raise edible oil prices, citing import costs and ensuring supply during Ramadan, despite falling global prices. The Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association (BVORVMA) proposed price adjustments, while the government recently reduced VAT on soybean and palm oil imports. Bangladesh relies on imports for 95% of its 2.4-2.5 million tonnes annual edible oil demand.
Local refiners pressed the government twice this month to raise edible-oil prices despite a falling trend in prices in the global market in recent weeks, sources say.
This came after the government on December 9 last year raised bottled soybean oil prices by Tk 8.0 a litre to Tk 175 amid a sudden crisis.
The Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association (BVORVMA) on January 6 and 15 proposed raising prices, arguing this is necessary to ensure a stable supply of the essential item during the upcoming Ramadan.
The association’s Executive Officer Md Nurul Islam Mollah said they had requested the commerce ministry to adjust soybean and palm oil prices after analysing the current stock and crude oil import costs.
There is no progress so far, he said.
The Bangladesh Trade and Tariff Commission in a report sent to the commerce ministry on January 9 said the prices of crude soybean oil and palm oil were $970.26 per tonne and $1,127.50 per tonne, respectively, until January 5.
The BVORVMA in a meeting with the commerce ministry in December last year said crude soybean oil prices in the international market had shot up to $1,200 per tonne that month from $1,000-1,050 per tonne in April.
The tariff commission report focused on the possibility of price reductions in Ramadan due to the declining trend in global market prices as well as the cut in duties and taxes on edible oil imports.
When local oil prices were increased in December 2024, the maximum retail prices of non-bottled soybean oil and palm oil were fixed at Tk 157 per litre each. The price of five litres of bottled soybean oil was set at Tk 852.
Commerce Adviser Sk Bashir Uddin announced the price hikes at a press briefing, saying edible oil prices had gone up by 20 per cent in the global market.
Before the December 2024 price hike, refiners increased soybean oil prices by Tk 4.0 to Tk 167 a lire on April 18 that year with the commerce ministry’s nod.
Also, the retail prices of non-bottled soybean oil were set at Tk 149 per litre with a Tk 2.0 increase.
In a report in late 2024, the home ministry sounded the alarm about a possible edible oil crisis during Ramadan in March this year and suggested ensuring an adequate stock of the essential item.
It said various syndicates of producers, importers, and dealers hike oil prices by pressuring the government and also control the market as they wish.
The government recently reduced VAT on the import, processing, and trading of soybean and palm oil to lower their prices, responding to the demands of refiners and importers.
The finance ministry announced VAT exemptions at the import and production stages in two separate notifications on October 17 and November 19 last year.
The VAT on local production and trading of soybean and palm oil was waived, while that on refined and crude soybean oil and palm oil at the import stage was reduced from 15 per cent to 5.0 per cent.
The facilities will remain effective until March 31.
The country’s annual demand for edible oil is 2.4-2.5 million tonnes, with over 95 per cent met through imports.
In FY24, Bangladesh imported around 2.3 million tonnes of non-refined edible oil, according to the commerce ministry.
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Source : The Financial Express
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