Wednesday, June 19, 2024


Dhaka Tribune

Cooking oil refiners want prices raised although global prices dropped

They claimed that they were experiencing losses due to purchasing dollars at Tk114-Tk 115 for oil imports, compared to the previous Tk111

Update : 10 Jul 2023, 07:00 PM

Bangladeshi cooking oil refiners have requested the government to increase prices despite a drop in the international market.

On July 6, the Bangladesh Vegetable Oil Refiners' and Vanaspati Manufacturers' Association wrote to the Commerce Ministry, saying a stronger US dollar and rising bank interest rates is the reason why what to raise prices. 

They claimed that they were experiencing losses due to purchasing dollars at Tk114-Tk 115 for oil imports, compared to the previous Tk111 set by the authorities.

In addition, they highlighted the increase in bank interest rates by 2.13 percentage points over the past year, following the new monetary policy for the first half of FY24.

They argued that raising soybean oil prices was necessary under these circumstances, as conducting business at a loss was not feasible.

Typically, soybean oil prices in Bangladesh are determined by the Bangladesh Trade and Tariff Commission (BTTC) and refiners, based on an analysis of international price trends and other relevant factors.

In mid-June, the government reduced cooking oil prices.

These prices have been adjusted multiple times in response to fluctuations in the international market, with a downward trend in cuisine oil prices beginning in May 2022.

According to the World Bank estimates, soybean oil was priced at $838 per tonne in 2020 but increased to $1,963 per tonne in May 2022.

However, global soybean oil prices subsequently dropped to a one-year low of $1,130-1,150 per tonne in April.

On June 11, 2023, local edible oil refiners, following the Commerce Ministry's instructions, reduced the maximum retail price (MRP) of bottled oil from Tk199 to Tk189 per litre.

They also lowered the MRP of a five-litre soybean oil jar to Tk920 and set the MRP of one litre of loose soybean oil at Tk167.

Besides, the price of palm oil was adjusted from Tk135 to Tk133.

According to the Trading Corporation of Bangladesh (TCB), as of July 9, the retail market in the capital city had bottled and loose soybean oil priced at Tk190 and Tk170 per litre, respectively.

These prices exceed the government's fixed rates declared on June 11.

During the task force meeting, it was reported that the global price of crude soybean oil on June 8, 2023, had decreased by 43.77% compared to June 8, 2022.

However, the local market only experienced a 2% decrease.

Similarly, global palm oil prices declined by 48.69%, while the reduction in the local market was only 20%.

Currently, importers are required to pay a 15% ad valorem duty on the import of crude soybean and palm oil.

To tame the rising prices, the government had previously granted duty waivers on the import of edible oil.

According to the Commerce Ministry, the annual demand for edible oil in the country exceeds 2-2.2 million tonnes, with over 95% being met through imports.

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