Despite high prices, cooking oil in Bangladesh is cheaper than most of South Asia

Only India and Bhutan sold soybean at prices lower than that of Bangladesh as of Sunday

In spite of a recent record hike in the price of cooking oil in Bangladesh, the country still offers the product at a lower price than that of most of its South Asian neighbours.

Only India and Bhutan sold soybean at prices lower than that of Bangladesh as of Sunday, although the prices of cooking oil varied from one Indian state to another.

Cooking oil is more expensive in Sri Lanka, Pakistan, Nepal, Afghanistan, and Maldives, according to data from respective countries and Marketinsider.com.

However, countries like Sri Lanka, Nepal and Afghanistan can be given a benefit of doubt given the recent economic and political turmoil.

However, in terms of per capita GDP, Bangladesh ranks fourth in South Asia, and in terms of per capita GDP, PPP, Bangladesh ranks fifth in the region with $1,961.6, and $5,138.7 respectively.

Recently, the Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association (BVOVMA) raised the retail price of bottled soybean oil by Tk38 per litre.

With the price hike, the maximum retail price of each litre of soybean oil is Tk198 now ($2.29).

At the same time, loose soybean oil will be sold at Tk180 per litre and palm oil price will be Tk172 per litre.

The new rates have been effective since Friday.

The Ministry of Commerce on Thursday approved the rate of cooking oil submitted by the BVOVMA before the Eid holiday.


Arifur Rahman Masum/Dhaka Tribune

The price of palm oil is $1.99 per litre in Bangladesh.

In India, soybean oil cost about $2.21 per litre as of Sunday, marginally lower than Bangladesh. However, the prices vary from state to state.

Palm oil cost $2.2 per litre, higher than Bangladesh.

According to the World Bank data of 2020, the GDP per capita of India is $1,927.7, a little lower than Bangladesh.

The GDP per capita, PPP of India is $6,503.9, which is, however, higher than Bangladesh.

In Pakistan, the price of soybean oil is $2.84 per litre, and the price of palm oil is $2.62 per litre, both higher than Bangladesh.

However, the GDP per capita and GDP per capita, PPP of Pakistan are $1,188.9 and $4,812.9, both lower than Bangladesh.

In Sri Lanka, per litre soybean oil cost $4.20 and palm oil cost $3.20, both higher than Bangladesh.

Photo: Mahmud Hossain Opu/Dhaka Tribune

The GDP per capita and GDP per capita, PPP of Sri Lanka are $3,680.7 and $13,224.6, both are higher than Bangladesh, showed the WB Data of 2020.

However, the current financial crisis of Sri Lanka impacted the price of daily commodities of the country, said experts.

In Nepal, the price of soybean oil is $2.57 per litre, and the price of palm oil is $3.91 per litre, higher than Bangladesh.

However, the GDP per capita and GDP per capita, PPP of Nepal are $1,155.1 and $4,008.5 respectively, both lower than Bangladesh.

Per litre soybean oil cost $2.54 and palm oil cost $2.20 in Afghanistan, both are much higher than Bangladesh.

The GDP per capita and GDP per capita, PPP of Afghanistan are $516.7 and $2,078.6, respectively, both lower than Bangladesh, showed the WB Data of 2020.

In Maldives, the price of soybean oil is $2.72 per litre, and the price of palm oil is $2.70 per litre, both higher than Bangladesh.

However, the GDP per capita and GDP per capita, PPP of Maldives are $6,924.1 and $13,443.5, respectively, both higher than Bangladesh.

In Bhutan, soybean sold for $1.76 litre, where palm oil sold at $2.62 per litre. The price of soybean oil is lower in Bhutan than Bangladesh but the price of palm oil is higher.

The GDP per capita and GDP per capita, PPP of Bhutan are $3,000.8 and $11,130.2, respectively, both higher than Bangladesh, showed the WB Data of 2020.

Expert’s take 

Cooking oil traders claimed that compared to the hike in oil prices in the international market, consumers in Bangladesh are still paying less to buy cooking oil.

The consumers of the neighboring countries have to pay more money to buy cooking oil, they added.

An official of Bangladesh Edible Oil Limited (BEOL), the producers of Rupchanda soybean oil, requesting anonymity, said that they have adjusted the new prices of cooking oil due to the volatile international market.

“However, we are still keeping oil prices significantly lower than most of our neighboring countries,” he claimed.

He also said that they are trying to keep the prices of cooking oil within the purchasing capability of the consumers of the country as compared to the price increase in the international market.

However, experts said that the currency depreciation and lack of adequate market monitoring accelerate the hike of cooking oil price.

If these can be done properly, then it would have been possible to keep the price of oil lower.

Talking to Dhaka Tribune, Zahid Hussain, former lead economist of the World Bank, said that in comparing prices with other countries, Bangladesh must consider two main facts.

“First, currency depreciation has been declining for the last several months. I don't think any other country in South Asia, except Sri Lanka and Pakistan, has seen its currency depreciate so much during this period,” he added.

As a result of such a decision of the government or Bangladesh Bank, the import price of oil has naturally increased.

“Second, our government has given tax exemption on the import and production of edible oil. I don't know if any other government has given so much tax exemption. But even then, the price of oil is not going lower,” he added.

He also said that it is important to know these contexts before calculating the oil prices of other countries.

“I don't think the government has anything else to do directly to reduce oil prices. However, market monitoring must be increased,” he added.

He also said that if the availability of oil in the market cannot be ensured by keeping the price low or raising the price, then there will be no profit in doing anything.

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