Wheat and unrefined edible oil prices witnessed a decline in the international market, which in turn have caused the prices of flour and cooking oil to drop in Bangladesh. However, the local market is yet to fully reflect the decline in global rates as the prices are still quite high.
The prices of these commodities rose significantly due to the Russia-Ukraine war. The conflict continues, but prices in the international market are gradually returning to the pre-war levels.
Traders say if the exchange rate of USD were not so high, prices of essentials would already have fallen to pre-war levels.
According to Trading Corporation of Bangladesh (TCB) data, flour (atta) prices fell by 12 per cent – 23 per cent, flour (maida) prices fell by 13 per cent – 14 per cent and soybean oil prices fell by 6 per cent – 13 per cent since the last month.
The price of pulses, an import dependent essential commodity, was being sold at low prices till the beginning of October, but its prices have gone up again.
The price of sugar also remains high. Although there are discussions within the government to reduce the import duty and price of sugar, there are doubts among the retailers about how effective these initiatives will be in bringing down the prices.
When the Russia-Ukraine war broke out in February last year, imports from these two major wheat exporters stopped. The war also disrupted the global supply chain. Because of these issues, the prices of food items including wheat, sugar, pulses, and edible oil had started to rise.
Since this year, prices of these goods started to come down.
Data from the Chicago Board of Trade (CBOT) show that wheat prices are currently hovering around $5 per bushel since last September. This is the lowest price since September 2020.
Wheat prices had risen to $13 a bushel in March 2022, shortly after the start of the Russia-Ukraine war. From there, the current market price has decreased by 160 per cent.
According to TCB data, when the Russia-Ukraine war started, the retail price of loose flour in the local market was Tk 35 – Tk 36 per kg. This price remained stable for several months after the start of the war. In July and August, the prices started to rise due to the effects of the war.
Near the end of 2022, the price of open flour in the retail market increased to Tk 58 – Tk 60. Before the impact of the war, the price of a packet of flour (atta) was Tk 40 – Tk 45, and by the end of the year it rose to Tk 65 – Tk 75.
Besides, the price of flour (maida) was Tk 46 – Tk 55 per kg before the war broke out, which later increased to Tk 65 – Tk 80 per kg at the end of 2022.
Though the Russia-Ukraine war rages on, the price of these goods started to fall from March this year. At present, the price of loose flour (atta) has come down to Tk 42 – Tk 45 per kg, which is around 25 per cent decline, compared to war-induced price hikes.
The price of packaged flour (atta) has come down to Tk 50 – Tk 55 per kg. Loose flour (maida) is being sold at Tk 55-60 per kg and packaged flour (maida) at Tk 60 – Tk 65 per kg.
The price of soybean oil has fallen slightly, but it has not yet returned to the pre-war level.
Currently, loose soybean oil is being sold for the pre-war price of Tk 145 – Tk 150 per litre, compared to Tk 160 – Tk 170 per litre a year ago. The price of bottled soybean oil has also returned to the pre-war level of Tk 165-168 per litre.
Although commodity prices are falling, the USD rate is on the rise. As a result, the price of products in the local market is not decreasing at the same rate as in the international market, traders say.
Before the impact of the war, the exchange rate was TK 85 – Tk 86 per USD, which rose to TK 106 by the November-December period of 2022. This rate is currently over Tk 115 per USD. Besides, many are unable to import products due to the USD crisis, insiders say.
Traders say if the USD rate had not increased so much, the prices of sugar and pulses – which are import dependent – would have come down further.
Currently, sugar is being sold for Tk 130 – Tk 140 per kg, which was Tk 75 – Tk 78 per kg before the war. Due to the impact of the war, the price rose to Tk 110 – Tk 120 at the beginning of this year.
The price of lentils is now Tk 105 – Tk 135 per kg depending on quality, which was Tk 95 – Tk 130 per kg last month. Before the war, lentils were sold at Tk 95 – Tk 135 per kg.
