Over the past week, the prices of all kinds of soybean and palm oil have risen by at least Tk 5 per litre. The prices of sugar have also increased by the same amount per kg. Traders have attributed the rise to a price hike in the global market.
“The edible oil market has become unstable globally over the past two months. The market has expanded but there’s the possibility of it shrinking again. Many of the traders have stopped importing edible oil because of that,” said Mohammad Ali Bhutto, general secretary of Bangladesh Wholesale Edible Oil Traders Association.
City Group General Manager Bishawjit Saha cited the same reason for the price hike of sugar.
“The government should take precautionary measures in advance as the prices have increased in the global market,” said Selim Raihan, an economist.
The government suffered a lot because of onion prices skyrocketing last year, Commerce Minister Tipu Munshi said on Thursday. He sought assistance from the traders to ensure there is no price hike of commodities during Ramadan.
However, the prices of sugar and edible oil are already rising four months prior to the Ramadan.
“The edible oil price has gone up in the past two weeks. Initially, the distributors did not increase the MRP. Later, they increased the MRP too,” said Habibur Rahman, a grocer in Karwan Bazar.
“The MRP of a 2-litre bottle of Bashundhara brand soybean oil is Tk 202. Earlier, we used to buy it for Tk 180 and sell for Tk 190. Now, we buy it for Tk 190 and sell for Tk 200,” he said.
The retail prices of Pushti soybean oil have been raised to Tk 110 from Tk 100 per litre while the MRP of 5-litre bottles of Bashundhara brand oil remains at Tk 506. Earlier, the distributors used to supply it for Tk 430; now they are supplying it for Tk 455. “As a result, we are selling it at Tk 480 per bottle,” Habibur said.
Rupchanda brand soybean oil used to retail at Tk 105 per litre, but now it has been increased to Tk 114, said Lutfur Rahman, a grocer at Mohakhali.
Retail prices of sugar have increased to Tk 65 from Tk 60 and the price of a packet of one kilogram of sugar has risen to Tk 70, he said.
Indonesia and Malaysia are the main traders of palm oil and they have reduced their business with Bangladesh, which have led to a crisis in the market, Bhutto told bdnews24.com. Prices of soybean oil are also rising in the global market.
“The millers are worried that a reduction in price may occur suddenly. Hence, they have reduced the import of edible oil,” he said.
“There are some local reasons as well for the price hike. The price of oil had to be increased by Tk 5 per litre,” Managing Director of City Group Biswajit Saha told bdnews24.com.
“Keeping the Ramadan in mind, if one has to open an LC, then the oil price would have to be further increased. Nobody can sustain a business with loss.”
Since soybean oil is imported, price hike in global market may influence its local price, Golam Khorshed, consultant to the commerce ministry, told bdnews24.com. However, the authorities are monitoring whether the companies are wrongly increasing local prices in the name of a global price hike, he said.
The country has demand for 300,000 tonnes of mustard oil, 2 million tonnes of soybean oil, 200,000 tonnes of palm oil, said the official. Apart from these, there is demand for 2.4 million tonnes of edible oil, including sunflower and rice bran oil.
There is no deficit in edible oil stock in the country as the import is continuing, Khorshed claimed.
Palm oil is imported from Malaysia and Indonesia while soybean oil is imported from Brazil and Singapore, said the traders.
The government should take measures to prevent any turbulence in the market, said Raihan, executive director of South Asian Network on Economic Modelling.
The local market prices of palm oil and sugar are much higher than the prices in the international market, he told bdnews24.com.
“The traders may reduce imports as a cautionary measure at this point. The government should remain alert about the stock of edible oil so that a situation similar to the onion price hike does not occur again,” he said.
“The commerce ministry or other government bodies should have correct statistics of demand and supply. They should have a clear idea of how other countries are managing similar situations,” said Raihan, stressing the need for correct information.