The Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association has urged the government to withdraw the existing system of administratively fixing edible oil prices and instead allow prices to be determined by market forces.
The recommendation was made in a letter sent to the Commerce Secretary on June 28, arguing that a competitive market is the most effective mechanism for determining prices by reflecting international market trends, import costs and domestic market conditions.
According to the association, a policy decision to move towards market-based pricing was taken at a meeting held on June 21. The letter also outlined several proposals to facilitate the transition.
It suggested that, alongside existing benchmarks such as import Letter of Credit (LC), in-bond and ex-bond prices, the government should also consider international commodity exchanges�"particularly the Chicago Board of Trade (CBOT)�"when assessing edible oil prices. The Bangladesh Trade and Tariff Commission could subsequently verify the relevant market data, it said.
The association further proposed establishing a central monitoring cell under the Bangladesh Trade and Tariff Commission, operating under the Ministry of Commerce, to oversee the overall market situation.
Under the proposal, companies would submit necessary pricing and market information to the monitoring cell, while any requests for data from government agencies would be coordinated through the same platform. This, the association said, would improve transparency and reduce duplication in data collection.
It also recommended that the Ministry of Commerce introduce a digital dashboard to store and monitor pricing-related information submitted by companies. The association expressed its willingness to finance and develop such a platform if required.
The association argued that allowing market forces to determine edible oil prices would encourage greater competition, ultimately benefiting both consumers and businesses.
In a competitive market, if one company raises prices unreasonably, rival firms would be able to offer products at lower prices, creating a natural balance and preventing excessive price increases, it said.
