Bangladesh's essential commodities market has been trapped in a recurring cycle of volatility for over a decade, where rice, lentils, onions, and green chilies, among other staples, have repeatedly experienced abnormal price hikes. Data from government agencies and market monitoring reports consistently indicate that these price surges are often less a result of production shortages and more closely linked to weaknesses in the supply chain and failures in market regulation. In this context, the crisis surrounding edible oil, particularly soybean oil, in April 2026 is not an isolated incident; rather, it reflects long-standing structural weaknesses, limited competition, and the realities of an import-dependent market system.
In Bangladesh, the vast majority of edible oil demand is met through imports, and the import and refining sector is largely concentrated in the hands of a small number of large corporate groups. As a result, effective market competition has remained largely absent, creating opportunities to influence prices by restricting supply under various pretexts.
The most alarming aspect of the current crisis is that it is not the result of a natural imbalance between supply and demand; rather, despite the existence of sufficient stock in the market, supply has been deliberately constrained to create an artificial shortage, enabling organized profiteering and raising serious questions about the state's capacity to regulate the market.
In December 2025, the government revised the prices of soybean and palm oil. The price of bottled soybean oil was set at 195 BDT per liter, loose oil at 176 BDT, and a 5-liter bottle at 955-965 BDT. However, the reality in April 2026 is entirely different. In major markets such as Karwan Bazar and Mohammadpur Krishi Market in Dhaka, as well as Khatunganj in Chattogram and large markets in Khulna and Rajshahi, bottled soybean oil has virtually disappeared. Where available in limited quantities, it is being sold at 220 to 230 BDT per liter. Loose oil is selling at 198 to 200 BDT, and palm oil is being sold at 185 BDT instead of the fixed price of 166 BDT. In effect, prices are 15 to 25 percent higher than the government-set rates, indicating a clear pattern of open defiance of regulated pricing.
This raises a fundamental question, is this a genuine supply shortage, or a case of supply control? According to basic economic principles, prices rise when supply decreases or production costs increase. However, in the current context, demand remains stable, sufficient stock from previous imports should be available, and there has been no sudden, significant increase in production costs.
Therefore, this situation cannot be explained as a natural market response. Instead, it appears to be a deliberate strategy to create bottlenecks at specific points in the supply chain, thereby exerting artificial pressure on the market.
The behavior of refining companies in this situation points to a calculated strategy. They first reduce supply to the market, which creates shortages at the retail level, and then use this situation to pressure the government into increasing prices.
Companies have already proposed raising the price of bottled oil from 195 BDT to 207 BDT and the price of a 5-liter bottle from 955 BDT to 1,020 BDT. There are also attempts to increase the price of loose oil. This process effectively constitutes indirect pressure on policymakers, where consumers are being used as leverage.
To justify price increases, businesses have cited instability in the international market, geopolitical tensions in the Middle East, and the depreciation of the local currency against the US dollar. However, a closer analysis reveals that the oil currently being sold in the market was imported several months ago. Therefore, it is not reasonable to justify current price increases based on recent international developments.
Moreover, there has been no sudden, extreme fluctuation in the global edible oil market that could explain such a supply crisis. As a result, this is not cost-push inflation but rather a strategy of market manipulation aimed at increasing profits. This situation has also exposed significant policy weaknesses. First, there is a lack of transparency in data related to imports, stock levels, and supply. Without access to accurate and real-time data, effective market monitoring becomes nearly impossible. Second, enforcement efforts have primarily focused on retail sellers, while large mill owners and importers remain largely untouched by strict regulatory actions. This allows the root causes of the problem to persist. Third, the weak enforcement of competition laws has enabled the emergence of monopolistic control, which is gradually evolving into cartel-like behavior.
From a legal standpoint, this situation clearly falls under punishable offenses. Under the Consumer Rights Protection Act, selling products above government-fixed prices is a punishable crime. Similarly, creating artificial shortages or hoarding goods to control the market is illegal. However, in practice, the enforcement of these laws remains limited and inconsistent. Regulatory actions are often confined to imposing fines on small retailers, which does little to dismantle large-scale syndicates.
The impact of this instability is being directly felt by the general population. Low-income groups are being forced to reduce their daily food consumption, while middle-income households are compelled to restructure their budgets, leading to a decline in their standard of living. Overall, this situation is accelerating food inflation and reducing real incomes, which may have broader negative implications for the economy in the long run.
The Trading Corporation of Bangladesh has attempted to provide some relief by supplying oil at subsidized prices. However, this initiative remains highly limited compared to demand. The long queues of people waiting to purchase small quantities of oil highlight the severity of the crisis. This is not a sustainable solution but rather a temporary relief measure.
Addressing this situation requires a coordinated set of short, medium, and long-term measures. In the short term, the entire supply chain, from import to retail, must be brought under a digital tracking system to ensure transparency at every stage. At the same time, direct monitoring and auditing of large importers and mill owners are essential. In the medium term, policies must be reformed to facilitate the entry of new market players and to break monopolistic control. In the long term, increasing domestic production of edible oil through agricultural incentives and investment is crucial to reducing dependency on imports.
Ultimately, this crisis is not merely about the price of a single commodity, it represents a critical test of the state's regulatory capacity and policy effectiveness. If a small group of business entities can influence the market by controlling supply and the government fails to respond effectively, it points to a deeper administrative weakness. Without immediate and decisive action, similar strategies may be applied to other essential commodities in the future. At that point, the issue will extend beyond price control to a more fundamental question about the relationship between the state and its citizens, whose interests the state ultimately serves.
The writer is a journalist
