Home ›› 27 Apr 2022 ›› Front
The Directorate of National Consumers’ Right Protection is taking steps to thwart middlemen activity in the edible oil market, in a bid to stabilise the kitchen essential’s supply and prices.
Insiders say a group of middlemen are buying up supply orders (SO) from dealers, and then reselling the commodity to wholesalers at a markup. These middlemen actively manipulate prices of this kitchen essential whenever supply decreases or demand increases.
The agency’s Deputy Director Mohammad Foyez Ullah said, “We have already issued a show cause notice to the Khatungonj Trade and Industries Association, asking why they have not taken the necessary steps to stop or remove these middlemen from the market.
“In the same notice, we have sought clarification from the association on why soybean oil is being sold at the market at higher prices, instead of the rate set by the government.” Terming the matter sensitive, Foyez Ullah declined to share any more details.
On February 6 this year, the government increased the price of soybean oil after analysing the import price and market. At that time, it had set the price of bottled soybean oil at Tk 168 per litre, loose soybean oil at Tk 143 per litre and palm super oil at Tk 133 per litre.
Recently, Indonesia – the world’s largest exporter of palm oil – announced that it will suspend exports from April 28, which affected the Bangladeshi market. Both wholesale and retail traders are selling edible oil at prices higher than that of the government.
Industry insiders told The Business Post that the middlemen are manipulating the edible oil prices behind the scenes to evade government monitoring.
Directorate sources say the supply of edible oil in the local market is still good, but there is an artificial crisis in some areas. In Chattogram, there has been a shortage of supply for the last two weeks. However, traders in Khatungonj said the supply increased slightly on Tuesday.
Soliaman Badsha, a trader in Khatungonj, said supply in the edible oil market had halved in the last two weeks, but on Tuesday it rose slightly again.
Meanwhile, a top official at City Group, one of the country’s top consumer goods companies, said on condition of anonymity that the supply is normal so far and the factories are selling edible oil at government
prices. Describing the supply line from the factory to the wholesaler, officials at the Directorate of National Consumers’ Right Protection said the factory owners first provide the SO (Supply Order) to the dealers.
Dealers are required to hand over the supply order to the wholesalers as per regulations. Instead, the dealers are selling these supply orders to a group of middlemen, causing the price of edible oil to increase by up to Tk 500 per maund.
The directorate, in its show cause notice sent to the Khatungonj Trade and Industries Association, asked the body to explain why action is not being taken against these middlemen despite repeated warnings, and why dealers cannot sell edible oil directly to the wholesalers.
On Tuesday, the association held a meeting with stakeholders regarding the show cause notice. After the meeting, the association’s General Secretary Sagir Ahmed told the media that since it is a legal matter, the body has decided to consult a lawyer before responding to the notice.
