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Amid a severe non-cooperation from foreign bidders in supplying edible oil, the Trading Corporation of Bangladesh (TCB) is now preparing new sourcing guidelines to avert a stock crunch, officials said.
The non-availability of commodities in a timely manner frequently compels the state agency to reschedule the open market sale (OMS) of essential items among needy people at subsidised rates, they added.
Data shows that the TCB did not receive any response in 63.2 per cent of international tenders it floated to purchase edible oil in the just-concluded fiscal year. Of the remaining 36.8 per cent of responses received from international bidders, the TCB could not buy oil in 92.8 per cent of the tenders.
Moreover, none of the international bidders responded to 48 per cent of the tenders floated to purchase sugar. Of the remaining 52 per cent of responses received, the TCB could not buy sugar in 75 per cent of the bids.
The TCB has identified several barriers to sourcing edible oil from international bidders, which include reluctance in supplying refined oil and limitations in decision-making by local agents who participate on behalf of international suppliers.
Moreover, since edible oil is an import-dependent commodity, any fluctuations in prices in the international market immediately impact the local market. Therefore, completion of the tender process in accordance with the Public Procurement Act (PPA) and Public Procurement Rules (PPR) cannot be ensured, the TCB said.
Besides, prominent international companies show unwillingness to supply refined edible oil according to the TCB's packaging requirements. They are also uninterested in participating in open tenders and do not wish to deposit the 2.0 per cent performance guarantee, which the TCB forfeits in case of a failure to supply commodities.
Concerned over repeated non-participation and non-supply of edible oil by international bidders, a committee headed by the Principal Secretary to the Prime Minister's Office was recently formed to find a way out and prepare sourcing guidelines for the TCB.
The committee had a meeting last week, during which it suggested that the TCB take steps to bring crude edible oil from international suppliers through the limited tender method and refine it in local refineries.
They also discussed the possibility of the state agency importing refined edible oil and packaging it by local businesses.
The meeting further explored the option of importing edible oil through government-to-government (GtoG) arrangements, similar to the Bangladesh Petroleum Corporation importing fuel oil from Middle Eastern countries under GtoG agreements.
The meeting also discussed the provision of relaxing some mandatory conditions under the PPA and PPR, such as the requirement of depositing performance security and offering validity.
When contacted on Sunday, TCB Chairman Brigadier General Ariful Hassan told the FE that the committee explored various procedures for the successful purchase of edible oil by the corporation.
He said apart from importing refined oil under GtoG arrangements and relaxing some conditions, the meeting also discussed signing long-term agreements with local suppliers.
"The renowned international suppliers are not interested in following many rules and regulations followed in state procurement, thus we plan to provide waivers in some areas," said Mr Hassan.
He said the TCB needs to buy edible oil throughout the year. "When we fail to buy from the international market, local suppliers take advantage of the situation."
The new guidelines aim to ensure an uninterrupted supply of edible oil, as the TCB provides commodities to 10 million families every month, he added.
In the fiscal year 2022-23, the TCB bought 178 million litres of soybean oil from local suppliers, while there was no supply from international bidders. The corporation has plans to buy 288 million litres of edible oil this fiscal year.
Meanwhile, on Sunday, the TCB began distributing essential commodities to 10 million families at subsidised prices. Each TCB cardholder is receiving two litres of soybean oil, two kilograms of lentils, one kilogram of sugar, and five kilograms of rice.