Edible oil crisis looms as fresh price hike sought

 
Concerns over another supply crisis of edible oil have emerged across the country ahead of Ramadan. Meanwhile, complaints have surfaced about reduced supplies of bottled Edible oil in the market. Bottled Edible oil in 2-litre and 5-litre containers is reportedly unavailable at many shops.

Against this backdrop, local refiners have proposed another round of Edible oil price hikes, citing rising prices in the international market. They claim that failure to adjust domestic prices could discourage oil imports, potentially leading to a major supply shortage when demand rises during Ramadan.

Just 20 days after Edible oil prices were increased on September 2, the Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association submitted a fresh proposal for price adjustment on September 20.
In a letter to the Ministry of Commerce, the association said the international price of Edible oil had increased from $1,270 to around $1,325 per tonne. As a result, refiners are incurring a loss of around Tk17 per litre of Edible oil, it claimed.

The letter also said refiners had continued opening letters of credit and supplying oil despite the losses after receiving assurances that domestic prices would be adjusted in line with international market prices.

However, Commerce Minister Khondkar Abdul Mukaddar said Edible oil prices would not be increased without properly reviewing the proposal. Speaking to reporters at an event in Sylhet last Friday, he said the government would take a decision after examining the matter.

Earlier in February, following a supply shortage, the price of bottled Edible oil was increased by Tk4 per litre to Tk199. In July, the market also experienced supply pressure amid claims of the impact of international prices and the dollar exchange rate.

Most recently, on September 2, the price of bottled Edible oil was increased by Tk5 per litre to Tk204. At the same time, the price of loose Edible oil was set at Tk185 per litre, while a five-litre bottle was priced at Tk975.

According to data from the Commodity Price Review and Forecasting Cell of the Ministry of Commerce, the international price of crude Edible oil was around $1,200 per tonne on September 30, down from $1,223 a week earlier.

Bangladesh has an annual demand for more than 2.2 million tonnes of edible oil. Against this, the country imports between 2.2 million and 2.6 million tonnes of crude Edible and palm oil annually. More than 90 percent of the country's edible oil demand is met through imports.