Story: The edible oil market continues to be volatile

Due to the Corona epidemic, there has been a shortage of edible oil in the world market due to low production. As a result, the oil market has become uncontrollable. The wave of that impact has also hit the market of Bangladesh. The price of this product is constantly increasing. Ordinary buyers have fallen into disarray.

It is learned that the average price of edible oil in the market of Bangladesh has increased by 56.25 percent in the last four months. In September’21, soybean oil was sold at Tk 80 per kg, up from Tk 160 a month ago. At present Tk180. The same is true of palm oil.

Last month, the country's oil traders feared that oil prices could rise further in line with the international market situation. In this regard, Commerce Secretary Dr Zafar Uddin said that due to the increase in the price of oil in the international market, the price has also increased in the domestic market. However, with this not only the international market, there is a little problem in our supply system. For example, many hands change to open oil from Millgate to the retail market. This increases the price a bit. He said the oil had to depend entirely on imports. We have asked the National Board of Revenue to take action on VAT. They are experimenting. We will also need revenue, again consumers will have to pay lower prices. Hopefully the price of oil will go down.

Citigroup Director (Corporate and Regulatory Affairs) Biswajit Saha said prices were rising sharply as supply of the product fell short of global demand. The USD 700 soybean oil is now USD 1220. And in the last few months, the price of oil has increased by USD 500, 40,000 per metric ton, Tk 40 per kg.

He said one of the reasons for the rise in oil prices in the world market is that China has bought soybeans in large quantities. Besides, there is Corona too. Oil supplies to Argentina, Brazil and the United States have declined. In addition, due to the high VAT, it is not possible to supply the product at a lower price to the general consumers.

In three stages, the VAT-tax is hit hard. A total of 40 percent VAT has to be paid on imports at 20 percent, on production at 15 percent and on sales at 5 percent. We have proposed to increase it to 15 percent at one level. If the government can take action here, it will be possible to control the price a bit.

Mostafa Haider, president of the Bangladesh Vegetable Oil Refiners and Vegetable Manufacturers Association, said oil prices were rising day by day. Because Brazil, Argentina and the United States are big markets for our imports. Corona production is low in these countries. Besides, China has bought oil at a huge rate this time. The government does not have the power to influence the international market. All the government can do is reduce VAT and help reduce marketing costs. Business cannot be sustained unless the government adjusts the price according to the way edible oil prices are rising in the international market.

According to a recent report by the Food and Agriculture Organization of the United Nations (FAO), edible oil prices have risen sharply in the last two months, pushing up the overall food market. The price of edible oil is rising in the world market for three reasons. Soybean and palm oil prices are rising in the world market due to shortage of supply, increase in export tax and huge purchases from China.

-Editor