Edible oil: Price hike in int’l market hurts local consumers

Due to price hike in the international market and the pandemic, the prices of wholesale edible oil are rising at the Chattogram’s Khatunganj — one of the country’s largest wholesale commodity hubs.

However, some small traders said the hoarding mentality of local oil dealers and the fears regarding the new wave of coronavirus are also the reasons behind the price hike on the local market.

At present, after the price hike, one maund (around 37 kg) of soybean oil is being sold at Tk4,000, which was Tk3,700 per maund just a month ago.

The latest rate of soybean oil in the international market is $922.41 per tonne, which comes to $40 per maund at the Khatunganj wholesale market. After adding 15% value-added tax (VAT) and other expenditures, the rate stands at Tk3,900 per maund. But the price is hovering between Tk4,000 and Tk4,500 on the local market.

On the other hand, the price of palm oil has also increased by Tk150-180 per maund on the wholesale market.

A tonne of palm oil is being sold at 3,850 Malaysian Ringgit in the international market which is Tk3,700 per maund at the Khatunganj wholesale market, including all VAT and taxes.

Asked about the reasons behind the price hike, oil dealers said the export-import chains are yet to normalise due to the coronavirus situation in the USA and Brazil — two main countries that export edible oil to Bangladesh.

M Salam Uddin, one of the oil dealers at the Khatunganj wholesale market, said the imposition of new lockdowns in different parts of the globe due to the second wave of coronavirus is cutting off international communication.

Meanwhile, there is a tendency among some larger economies of stockpiling edible oil for future use, raising the price in the international market, he said, adding that the price of soybean oil had now broken all previous records in the pandemic period.

Biswajit Shah, director of Corporate and Regulatory Affairs of the City Group, said the prices of edible oil have been rising since October, and the reflection is visible on the wholesale market.

On the other hand, Brazil and the USA, two main exporters of soybean, halted their cultivation due to a pandemic situation, increasing the price in the international market.

As wholesalers have increased the prices in line with international prices, retailers have no option except to buy the oil at the increased prices, hitting consumers hard.

In the port city retail market, bottled and packaged soybean oil prices have increased in the last two weeks.

For instance, a litre of soybean oil of Rupchanda, Fresh, and Teer brands is being sold at Tk115-120, which was Tk105-108 even two weeks ago.

A bottle of five-litre soybean oil of the same brands is being sold at Tk560-570 which was Tk510-515.