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The Bangladesh Trade and Tariff Commission (BTTC) yesterday suggested the commerce ministry review the price of edible oil in local markets as the product’s price is declining globally.
However, the Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association sent a letter to the commerce ministry last week, demanding prices be increased further as the crude edible oil previously booked by local processors at lower rates is yet to enter the country.
The BTTC recommended reducing the local retail price of palm oil as international rates for the product are on a downward trend, according to Tapan Kanti Ghosh, senior secretary of the commerce ministry.
Palm oil imports are rising as Indonesia, the world’s largest supplier of the key cooking ingredient, recently withdrew its export ban on the product and is now supplying it at lower rates.
And although Ghosh declined to elaborate on the soybean oil situation, he said the product was included in the BTTC’s recommendations.
“We will review the prices of edible oil soon,” he added.
Commerce Minister Tipu Munshi had hinted last week that edible oil prices may come down in local markets as international prices of the product were declining.
However, a source at the BTTC said that since soybean oil prices have not fallen to the expected level in international markets, it may not be possible to reduce local retail prices in the upcoming review.
Last month, the average price of bottled edible oil was increased by Tk 38 to Tk 198 per litre from Tk 160 per litre in April following the price hike of cooking oil in international markets.
The price was hiked despite a host of remedial measures taken by the government, such as reducing value added tax to 5 per cent from 15 per cent in March.
The latest price of soybean oil was hiked considering the base price of crude soybean oil, which stands at $1,790 per tonne for local importers and refiners due to the government benefits afforded to them as producers of an essential commodity.
The base price of crude soybean oil did not come under $1,800 per tonne even though the product’s price has been showing a downward trend in international markets, the BTTC official said on condition of anonymity.
As such, it might not be possible to decrease the price of soybean oil in local markets through a review.
The local impact of lower rates for soybean oil in international markets may be reflected from the end of July as importers are opening letters of credit quoting lower prices, he added.
The price of edible oil recently witnessed abnormal increases in the domestic market following the rise in international prices of cooking oil and Indonesia’s export ban on palm oil.
Bangladesh requires about 20 lakh tonnes of edible oil each year with demand increasing by between 2.5 lakh and 3 lakh tonnes during Ramadan, as per data from the commerce ministry.
Only around 2.03 lakh tonnes of the product can be sourced from local production while the remaining demand is met through imports. Of the country’s total edible oil imports, crude soybean oil comprises some 5 lakh tonnes.
Meanwhile, roughly 24 lakh tonnes of soybean seeds are imported as well to produce around 4 lakh tonnes of edible oil, the data showed.
Similarly, Bangladesh imports 11 lakh tonnes of crude palm oil, of which some 85 per cent comes from Indonesia.
(TDS)
