Home ›› 13 Oct 2021 ›› Front
In spite of its price fall in the international market by 5 per cent, the price of edible oil in the domestic market has increased by the same percentage point within a span of just one month.
Even after this, producers and marketing enterprises are keen to further hike the prices of soybean and palm oil as well as sugar in the local commodity market.
They have proposed to raise the price of soybean oil by Tk 14 per litre, palm oil by Tk 9 per litre, packet sugar by Tk 23 per kg and loose sugar by Tk 11 per kg in the domestic market.
Bangladesh Vegetable Oil Refiners and Vegetable Manufacturers Association and the Bangladesh Sugar Refiners Association placed their proposal in black and while to the Ministry of Commerce recently.
According to sources, a meeting will be held at the commerce ministry with the traders next Sunday and a decision may come up in this regard.
AHM Safiquzzaman, additional secretary to the Ministry of Commerce, told The Business Post that the traders had proposed increasing the prices of edible oil and sugar in the domestic market citing the price hike of these commodities in the international market.
“Now, Tariff Commission is reviewing the issue. After receiving the report of the commission, a decision will be taken in a meeting with all,” he said.
In the letter, the refiners’ association said it wants to fix the price of per litre bottled soybean oil at Tk 167, loose soybean oil at Tk 143 and loose palm oil Tk 125.
Ironically, before the decision has been taken in this regard, traders have already raised the price of loose soybean oil by Tk 11 to Tk 140 per litre and palm oil by Tk 5 to Tk 130 per litre.
However, bottled soybean oil is being sold at a fixed price of Tk 153 as earlier.
A Karwarn Bazar wholesaler Abul Kashem, owner of Sonali Traders, said the supply of edible oil has already been crunch sensing its price hike.
“The availability of cooking oil is less than the demand. Since the government set the price last month, the millers kept increasing the price by Tk 1 to Tk 2 per liter every week. For this reason, the price of loose edible oil has gone up in the market,” said the trader.
The latest price was fixed on September 5 in consultation with the Ministry of Commerce and the Bangladesh Trade and Tariff Commission. There loose soybean oil was priced at maximum Tk 129 per litre and the bottled one at Tk 153.
On the other hand, the maximum price of five-litre bottled soybean oil was set at Tk 728 and that of loose palm super well at Tk 116.
On March 15, the commerce ministry fixed Tk 139 for every litre of bottled soybean oil.
Compared to the price set on March 15, bottled soybean oil now sells at a higher price of Tk 14 per litre to Tk 153.
As per the law, the Ministry of Commerce has to be informed before any price hike. For this reason, the organisation has proposed to increase the price again.
According to the World Bank’s Commodity Price Report, the price of soybean was $600 per metric tonne last July which fell to $ 586 in August and $558 in September. Similarly, the price of soybean oil fell from $1468 per metric tonne in July to $1434 in August. It dropped further to $1,399 last September.
The price of soybean oil was $1329 per metric tonne in the international market on Monday. As per the account, the price of soybean oil has dropped by $139 per metric tonne.
However, the average price of palm oil in July was $1,063 per metric tonne which rose to $1,142 in August and $1,181 in September. Now it has come down to $1162 in October.
The National Board of Revenue on April 11 withdrew 4 per cent advance tax on edible oil imports to stabilise its prices in the domestic market, but to no avail.
Even after this, the Ministry of Commerce sent a recommendation to the NBR to withdraw the VAT collected in advance in response to the demand of the traders.
Further hike in sugar price proposed
Meanwhile, on September 9, the commerce ministry set the maximum retail price of loose sugar at Tk 74 per kg and packaged sugar at Tk 75 a kg.
Although the price has been fixed, no effect is in sight in the market.
Despite this, the Bangladesh Sugar Refiners Association proposed to increase the price of sugar again, citing the recent price rise in the international market, which is not true.
The organisation has demanded a maximum retail price of Tk 98 per kg for packaged sugar and Tk 85 for per kg loose sugar.
However, the price of sugar in the world market has not increased.
A review of the World Bank’s commodity prices showed that the average price of sugar was 43 cent per kg in August and in September. As a result, the price of per kg sugar was Tk 36.
Before setting the price last September, the Bangladesh Trade and Tariff Commission calculated the international market prices as well as other costs and fixed the production cost of sugar at Tk 70. As per the calculation, the maximum retail price was set at Tk 74.
Asked why they want to hike soybean oil price when the international market witnesses its fall, Safiul Athar Taslim, director of TK Group, a leading edible oil marketer, told The Business Post that sugar and edible oil prices are rising abnormally in the global market.
He claimed that the domestic prices of the commodities were not determined by adjusting the prices of international market; for this reason, they proposed the government for fixing the price last month.
“However, we do not want to reduce the prices,” said the businessman.
Providing more details, he said, “The commerce ministry had set the price of per litre soybean oil at Tk 153, at a time when the price of per tonne unrefined oil was $1,150. But this price has now increased to $1,270-$1,300 per tonne.
“As we are marketing the soybean oil imported at higher prices, it is not possible to sell at the price set by the government. This is why we are requesting the ministry to readjust the price.”
He added that with the new import price of soybean oil, the cost of per litre would be at Tk 167.
“Though the refiners had proposed a readjustment of the soybean oil price last September, the government is yet to take steps regarding the matter. This is why the market has turned volatile, and the refiners hiked the prices of loose soybean oil,” he added.
