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Local refiners in recent months have pressed the government several times to increase edible-oil prices in the light of the substantial price rise in the international market, industry insiders say.
The Bangladesh Vegetable Oil Refiners' and Vanaspati Manufacturers' Association (BVORVMA) urged the commerce ministry in June and November this year, and also in between, to adjust soybean and palm oil prices, but got no response.
As a result, the edible oil industry has been facing losses, the association claimed.
It also explained to the ministry prices should be increased as the materials needed for production and other relevant purposes have become pricier in the local market.
The BVORVMA said the ministry had sent its proposal to the Bangladesh Trade and Tariff Commission, seeking opinions and suggestions.
However, a senior commerce ministry official told The Financial Express they had received no proposal yet and declined to comment further.
Crude soybean oil prices in the international market were around $820-850 per tonne in April, which shot up to $1,225 per tonne on Wednesday, an increase of around 47 per cent.
Refiners increased edible oil prices in April this year after getting the commerce ministry's approval. On April 18, they raised soybean oil prices by Tk 2-4 a litre.
Bottled soybean oil prices were increased to Tk 167 a litre from Tk 163 a litre. Also, the retail prices of loose soybean oil were set at Tk 147 per litre with a Tk 2 per litre increase.
Moreover, the retail price of a five-litre soybean oil bottle was raised to Tk 818 from Tk 800. The maximum price of palm oil was fixed at Tk 135 a litre.
However, the prices of edible oil, including loose soybean and palm oils, rose further by Tk 5-6 a litre in the market, troubling consumers amid spiralling prices of other commodities.
Loose soybean oil prices increased to Tk 165-166 a litre and super palm oil to Tk 158-162 a litre, according to kitchen market traders.
In a recent investigative report, the home ministry sounded the alarm about a possible edible oil crisis during the holy month of Ramadan in March next year and suggested ensuring an adequate stock of the key essential.
It recommended the commerce ministry and all divisional commissioners prepare for facing the situation by taking stern action against hoarders and profit mongers with the aid of mobile courts and the Directorate of National Consumers' Right Protection.
The ministry said various syndicates of producers, importers, and dealers hike edible oil prices by pressurising the government and also control the market as per their wish.
According to the ministry, Bangladesh's estimated annual demand for edible oil is 2.4-2.9 million tonnes, with over 95 per cent met through imports. In FY24, the country imported around 2.3 million tonnes of non-refined edible oil.
The government recently reduced VAT on the import, processing, and trading of soybean and palm oils to lower their prices, responding to the demands of refiners and importers. The finance ministry announced VAT exemptions at the import and production stages of edible oils in two separate notifications on October 17.
VAT on local production and trading of soybean and palm oils was exempted, while that on refined and crude soybean and palm oils at the import stage was reduced from 15 per cent to 10 per cent. The facilities remain effective until December 15 this year.