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Artificial crisis makes edible oil mkt volatile

Published : 11 Mar 2022 09:04 PM | Updated : 12 Mar 2022 03:02 PM

The country’s edible oil market has been in turmoil for the past few weeks with prices rising sharply by 25 percent, mainly for unscrupulous traders creating an artificial crisis, hoarding oil ahead of the upcoming Ramadan.

The price of soybean was increased by Tk 7 per liter and bottled oil by Tk 8 per liter in response to demands from refineries due to rising fuel prices in the international market. After that, on the pretext of increasing prices in the international market, they proposed to increase the price by another Tk 12 per liter at the end of February. But at a meeting of the Ministry of Commerce, the proposal was rejected.

The capital’s Karwanbazar retailer Md. Yusuf said the companies had cut off oil supplies. Because of this the prices are going up. At present, a five liter bottle of soybean oil is being sold at Tk 800. However, there is no supply of oil according to the market demand. 

From the mill or distributor level, they are trying to increase the price by another round on the eve of Ramadan. They said that due to rising prices in the world market, imports are declining. So there is a crisis. So the mill is not supplying oil as per the demand, he added. 

However, the Directorate of National Consumers’ Right Protection (DNCRP) has asked edible oil refining companies to provide information on how much oil has been imported in the last three months, how much oil has been refined, and how much oil is in stock, including customs papers. 

At the same time, the government body has also asked to inform how much oil DO or SO has been given by the companies, how much oil has been delivered and how much is in stock so far.

The DNCRP was supposed to submit their detailed report to the commerce ministry on Monday. 

Following the report submission it was learned that businessmen informed that millers and dealers are jointly manipulating the country’s oil market. They have demanded to form a joint committee with the representatives of the DNCRP, FBCCI, and business community to monitor oil supply from the mill gate. 

DNCRP director general AHM Shafiquzzaman said that from the drive they have found that there is satisfactory storage of edible oil. No concession will be given to those involved in raising prices by creating an artificial crisis. The amount we currently have in stock will not be a problem until the month of Ramadan. 

On visiting the capital’s Karwan Bazar and other kitchen markets it was learned that few companies that used to trade only in edible oil are now also doing rice business. Following the oil price hike, now those companies have made a rule that rice with oil should be bought at the same time.    

Agriculture minister Dr. Abdur Razzque on Sunday hinted that in the present context, businessmen will not be interested in importing unless oil price is not increased. However, the government is strictly monitoring the market and trying to bring enough edible oil. 

To keep the country’s oil market stable, FBCCI President Jasim Uddin has demanded withdrawal of VAT on edible oil imports for the next three months. He said the government will not be able to stop the rise in prices in the world market. Therefore, the government may subsidize oil and there may be a tax adjustment. Neighboring India has undergone VAT-tax adjustments thrice. 

DNCRP director general AHM Safiquzzaman said that the artificial oil crisis at the retail level was mainly due to the stockpiling of soybean oil by millers, importing companies and wholesalers and retailers. According to him, as oil prices have gone up in the international market, companies are not supplying oil in the market with the hope that it would rise in the country as well.

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