Edible oil prices witnessed a fresh spike over the last few days in line with rising international prices, supply rationing by processors and wholesalers, and decreasing spending power of the country’s fixed and low-income earners.
Consumers at wet markets in Chattogram had to pay about Tk 142 for one litre of soybean oil yesterday, up 3 per cent from Tk 138 a week ago.
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To buy loose soybean oil, consumers had to pay up to Tk 126 per litre, up 7 per cent from Tk 118 a week ago, retailers said.
Prices saw a similar increase in Dhaka.
For example, consumers had to pay between Tk 640-600 for a 5-litre of oil on Friday, which is nearly 2 per cent higher than previous prices, shows data compiled by the Trading Corporation of Bangladesh.
The latest prices of soybean are higher than the prices previously set by the commerce ministry in March.
Md Hasem, a retailer of Fultaz Shop at Hamzarbag Market in the port city, said they were charging higher prices as the refiners had raised the wholesale cost.
“All refiners have increased oil prices as well as reduced supplies owing to the import crisis and rising prices in international markets,” he added.
Wholesalers at the Khatunganj-Chaktai market in Chattogram and Moulvibazar in Dhaka, two of the country’s biggest trading hubs for edible oil, said prices went up by Tk 300 per maund (37 kilogrammes) in the last three days due to a supply shortage amid the countrywide lockdown.
Similarly, palm oil prices grew by 8per cent to Tk 4,100 per maund yesterday from Tk 3,800 on April 14.
“Prices are increasing as the supply of oil is falling short of the market demand,” said Abdur Rahman, a wholesale trader in Khatunganj market.
Abul Hashem, general secretary of Bangladesh Edible Oil Wholesalers Association, echoed the same.
Importers and traders said that the local edible oil market has once again become unstable as prices in the international market have risen over the last few days.
Besides, the ongoing coronavirus pandemic and recent surge in infections has also affected supply from major edible oil exporters.
Moreover, the supply chain is being disrupted due to the countrywide lockdown, they added.
Biswajit Saha, director for corporate and regulatory affairs at City Group, said the bulk of Bangladesh’s soybean and soybean oil demand is imported from Brazil and Argentina,
However, production and supply has been hampered in those countries due to the resurgence of Covid-19, he added.
Saha went on to say that the price of soybean may increase further in the international market, which will have another impact on the local market.
Abdur Rashid, a wholesaler at Khatunganj market in Chattogram, said the supply of edible oil has not increased in line with the higher demand during Ramadan.
Bangladesh consumes roughly 20 lakh tonnes of edible oil annually and the fasting month of Ramadan accounts for 10 per cent of that yearly requirement, data from the Department of Agricultural Marketing shows.
Rashid blamed millers for the reduced supply, citing that he did not receive the delivery of edible oil consignments against orders made two weeks ago.