Hours after the commerce secretary's hint of adjusting edible oil prices to global price fall, refiners on Sunday announced a Tk6 cut per litre of soybean oil – a response much less compared to the rise the kitchen essential saw in several months.
The price of soybean oil in the country also skyrocketed over the last few months due to price hikes in the global market following the Russia-Ukraine war.
But the prices of per maund soybean and palm oils in the international market have recently dropped by at least Tk1,800, and Tk2,500, respectively.
The global price drop has not affected the domestic market as expected. On the contrary, on 9 June, the government increased the price of soybean oil by Tk 26 per maund (Tk6 per litre).
The price of palm oil, however, was slashed by only Tk 582 per maund (Tk14 per litre) on that day.
The Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers' Association issued a press release on Sunday setting loose soybean oil price at Tk180 a litre, down from Tk185. The price of bottled soybean oil has been reduced to Tk199 from Tk205 per litre, and the price of a five-litre bottle was fixed to Tk980 from Tk997.
Earlier, at a press conference in the Secretariat on Sunday, Senior Secretary to the Ministry of Commerce Tapan Kanti Ghosh assured consumers that the prices of edible oils will be adjusted in the country.
Asked how much the price would be reduced, the secretary said, "A meeting with traders would be held in the next couple of days or this week to adjust the prices. However, as the dollar's value rises, it may not be possible to reduce it too much."
According to consumers, importers and traders raise the price of edible oil in the domestic market as soon as the price rises in the international market. The opposite can be rarely seen. When the price drops in the global market, it does not affect the domestic market for many months.
Market analysis has shown that the price of edible oil in the international market is declining almost every day.
In just two weeks, the price of soybean oil in the international market has dropped by more than $200 per tonne and the palm oil price has fallen by $688 in the last two months.
Traders agree that global edible oil prices have started to decline after record prices in March-April last year. But the price remained high in the domestic market.
In wholesale and retail markets, edible oil is sold at the government's fixed prices.
In Khatunganj, per maund (40.90 litres) palm oil was sold at Tk6,300, and soybean at Tk7,500 on Sunday.
Advocate Akhter Kabir Chowdhury, president of the Transparency International Bangladesh's Chattogram chapter, said, "With the increase in booking prices in the international market, the importers hiked the price of edible oil by creating an artificial crisis in the domestic market."
At the same time, the importers put pressure on the government monitoring agencies to adjust the prices from wholesale to retail, he said.
But even though the price of the product has been falling in the world market for two months, the importers and government agencies are not working to reduce the price in the domestic market, Akhter Kabir said, noting that consumers are being the victims as a result.
Pradeep Karan, deputy general manager (Sales) at Citigroup - one of the country's leading edible oil importers and refiners, said, "Demand for the product in the wholesale market has declined a bit due to falling global prices. The products that are currently in the market are bought at higher prices."
"As a result, even though the demand has decreased, the importers have not been able to reduce the price of the product," he said, adding that the price will go down automatically due to market competitiveness.
Mahbubul Alam, president of the Chittagong Chamber of Commerce and Industry, said, "Prices of any product, including edible oil, would head down after a steady rise. This is the rule of the market. The role of government regulatory bodies is important in this case."