Demand for edible oil drops significantly

Demand for edible oils has declined in the market due to prices rising in several instalments. Traders say the demand has fallen by 20-50 per cent at all levels of retail and wholesale due to the declining purchasing power of the people. Demand for bottled edible oil has declined the most.

However, some traders believe that the season for summer fruits has started and caused a drop in the sale of bakery and fried foods, which could be a reason for the decline in demand for oil.

“The demand for oil in the market routinely falls every year during the summer fruit season. However, the drop was acute this year. Our sales have also decreased,” TK Group director Shafiul Athar Taslim said.

“Although at the moment I don’t have the exact figure, the rate of decline in oil demand can range from 10 per cent to 50 per cent. One of the major reasons is the excessive price. Naturally, when prices rise, people’s purchasing power decreases. That is what happened in this case,” he added.

After the price of soybean oil rose by Tk 38 per litre on May 5, the government again raised it by Tk 7 per litre on May 9. In other words, the price of soybean oil has increased by Tk 45 per litre in the span of 35 days.

According to the Trading Corporation of Bangladesh (TCB), edible oil prices in the retail market have risen by an average of 43 per cent this year compared to the same time last year.

When asked, Bangladesh Wholesale Edible Oil Traders’ Association Vice-President Mohammad Ali Bhutto said that demand in the market fell sharply as oil prices continued to rise.

“Although we have not yet been able to accurately calculate how much the demand declined, it will not be less than 20 per cent. The first and foremost reason for this is the high price,” he said.

“What’s surprising is that despite the lower demand for oil and lower prices at the mill gate, the government suddenly raised prices. The price also wasn’t hiked at a reasonable rate. Soybean oil is being sold in the wholesale market at Tk 3 per litre less than the government rate and palm oil is being sold at Tk 2 per litre more,” Bhutto added.

Ziauddin, a dealer in the Shantinagar area of ​​a brand of edible oil, also confirmed that the demand for bottled oil had fallen sharply.

“Before, I could sell 500 cartons of oil daily, which has now declined to 200-250 cartons. The situation is the same for all companies, not just my company’s dealers. In other words, the demand for oil has decreased by 50 per cent,” the dealer said.