Supply up 25pc, but groceries still out of soybean oil

The supply of soybean oil by the leading refiners increased by 25 per cent in January 2025 compared to the same month last year, said businesses at the Bangladesh Trade and Tariff Commission's (BTTC) special meeting on Sunday.

The commission organised the meeting to assess the overall edible- oil-supply situation in the market ahead of the upcoming holy month of Ramadan.

The meeting was presided over by BTTC Chairman Dr Moinul Khan, while acting commerce secretary Abdur Rahim Khan also spoke. Representatives from the leading edible oil refiners were present.

The discussion focused on whether there is currently any shortage of bottled soybean oil in the market. The producers said they had increased supply in recent months compared to the previous years.

Adviser at City Group Amitabh Chakraborty said the company supplied 50,700 tonnes of edible oil last month, of which 22,242 tonnes were bottled.

In contrast, in January 2024, they had supplied 14,262 tonnes of bottled oil, he said.

General Manager of Meghna Group Taslim Shahriar said they had supplied 47,668 tonnes in January 2025, including 15,000 tonnes of bottled oil.

In the same month of the previous year, their total supply was 25,000 tonnes, with 12,000 tonnes in bottled form, he said.

Director of TK Group Shafiul Atahar Taslim said they had supplied 11,810 tonnes of bottled soybean oil last month compared to 9,500 tonnes in January 2024.

The other producers present at the meeting also confirmed a significant increase in supply compared to the previous months.

Based on the data presented, BTTC found the supply of bottled soybean oil in January 2025 increased by approximately 25 per cent compared to the same month of the previous year.

Refiners said several edible oil-laden vessels currently anchored at the Chattogram port are awaiting unloading.

The shipments would soon be added to the local supply, ensuring stability. There are approximately 0.15 million tonnes of edible oil there, which indicates the overall supply is sufficient, they added.

They also said in certain cases, bottled oil may have been repackaged by sellers into loose oil for higher profit margins.

Due to higher prices in neighbouring countries, there is also a risk of informal cross-border trade, noted refiners.

The meeting concluded that the minor market disruptions are artificial, caused by misinformation.

Customs data shows edible oil imports increased by 35 per cent in the last two months (December 2024-January 2025) compared to December 2023-January 2024.

Besides, letters of credit (LCs) for imports rose at the same rate.

As international prices remain stable, the local market is expected to remain steady. However, the meeting decided to intensify some activities, including protecting consumer interests and monitoring the market, at all levels of production and distribution.

Some businesses impose conditions on distributors and grocers, requiring them to purchase other products along with edible oil. Such practices are illegal. If any such complaint is proven, strict legal action will be taken, said BTTC.

The district administration and law enforcement agencies in border areas will investigate whether edible oil is being smuggled out and will take strict legal measures to prevent it, BTTC said.

Refiners must ensure that their appointed distributors sell oil to consumers at the government-fixed prices without any disruptions. However, despite the assurance given by the refiners at the meeting, the edible oil market remains volatile.

Many distributors allegedly sold stored oil at higher rates. On the other hand, some grocers were found selling copycat products at Tk 190-210 a litre against the official price of Tk 175 per litre, according to kitchen market sources.

Apart from soybean oil, palm oil prices also shot up by Tk 10-15 a litre, with loose oil vendors in Dhaka's kitchen markets selling it at Tk 175-185 per litre.

Meanwhile, after the hike in price in December 2024, the refiners have again urged the government to raise prices further.

On January 6 this year, the Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association sent a letter to the commerce ministry, requesting a price review in light of the global market trends and rising import costs.

The request was reiterated in another letter on January 15, confirmed a ministry official.

To reduce the financial burden on consumers, the government had earlier withdrawn import duties and VAT on soybean oil, bringing the cost down by Tk 8.0-10 per litre.

However, with the rising dollar exchange rate, the government revised up the price to Tk 175 per litre, which refiners accepted.

Before this adjustment, the National Board of Revenue (NBR) had announced major tax exemptions on December 16 last year, including the removal of import duties, regulatory duties, and advance income tax on both refined and non-refined edible oil, such as sunflower, canola, soybean, and palm oil. The exemptions are effective until March this year.

VAT on edible oil for final consumers was waived, and that on imported edible oil was reduced to 5.0 per cent from 15 per cent.

These steps, based on recommendations from BTTC, aimed to stabilise the market and ease consumer burden, according to NBR officials.

Despite all efforts by the government, the edible oil market has become volatile amid loose market monitoring, said SM Nazer Hossain, vice president of the Consumers Association of Bangladesh (CAB).

CAB Chattogram division unit Secretary Iqbal Bahar Sabery criticised refiners for employing what he called "ransom tactics" to press home their demands.

He accused refiners of exploiting their market dominance, made possible by a value chain controlled by merely six to seven companies.

"In the early 2000s, there were 250-300 edible oil importers in Chattogram and Dhaka. Over the last 16 years, that number dwindled to just a few," he said.

Sabery urged the interim government to take strong action against oligopoly and implement an import policy that boosts a competitive market environment.

Bangladesh needs 2.2-2.5 million tonnes of edible oil annually. 95 per cent of the demand is met through imports.

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