Panic-buying causes retail shortage despite ample stocks of edible oil, sugar

Despite adequate imports and stocks of edible oil and sugar in Bangladesh, panic-buying triggered by fears over the ongoing US-Israel-Iran war has created shortages at the retail level in the capital.

Traders and importers say there is no actual supply crisis, noting that the country still holds sufficient stocks to meet demand for at least a month, while import activities remain normal.

A visit to several markets in the capital showed that loose soybean oil is being sold at Tk178-193 per kilogramme. Five-litre bottles are selling for Tk940-Tk955, while two-litre bottles are priced between Tk390 and Tk395. Palm oil is being sold at Tk158-Tk162 per kilogramme, and sugar at Tk100-Tk105 per kilogramme.

In many neighbourhood grocery stores, however, the supply of soybean oil appears insufficient compared with demand. Five-litre bottles are largely unavailable, according to retailers, a situation that has persisted for around two weeks.

Traders say the shortage is mainly due to a surge in consumer demand. Mohammad Saiful Islam, a trader in Dhaka's Shahjadpur, said companies are supplying very limited quantities of bottled oil. 

"We hardly receive five-litre bottles, and two-litre bottles arrive only occasionally. Companies are saying they themselves do not have enough supply. People have also been buying more than usual, but at the moment I simply do not have the product to sell," he said.

Among consumers, anxiety about the war has also led to stockpiling. Israt Jahan Lipsa, a resident of Mohammadpur and a former banker, said she bought two months' worth of groceries after the war began.

"During crises or disasters, food prices usually rise and sometimes products become unavailable. We have seen this before, so I bought two months' worth of supplies in advance so that we would not face problems if shortages occur," she said.

At the wholesale level, however, traders say the supply of edible oil and sugar remains sufficient. At Karwan Bazar in the capital, wholesaler Mamunur Rashid said there had been minor disruptions for a day or two, but the situation has now normalised.

According to the commerce ministry, Bangladesh's annual demand for soybean and palm oil is around 25 lakh tonnes, while sugar demand stands at about 20-21 lakh tonnes. 

Of this, only around 30,000-37,000 tonnes of sugar are produced locally. Demand for both commodities peaks during Ramadan, when around 3 lakh tonnes of each are required.

Ample storage confirmed by importers

Officials from oil and sugar importing companies also insist there is no real shortage. They say panic buying is largely responsible for the temporary supply pressure in the retail market, adding that private companies currently hold at least one month's stock.

Supplier companies have also rejected claims of a soybean oil shortage, saying the scarcity at local shops is the result of panic-buying rather than supply disruption. Some industry insiders, however, said a few companies, including Bashundhara, faced difficulties opening letters of credit (LCs), which may have created limited supply constraints.

Taslim Shahriar, deputy general manager of Meghna Group, one of the leading suppliers of consumer goods, said the company imported additional oil and sugar during January and February compared with regular months.

"We are supplying more than 50,000 tonnes of oil per month. There should be no shortage," he said, adding that if problems arise at the dealer level, the Directorate of National Consumer Rights Protection should take action.

Echoing the view, Biswajit Saha, executive director of City Group, said the company has not reduced supply. He noted that some smaller firms are struggling to import edible oil due to LC-related complications.

"The temporary shortage may be linked to the extra demand during Ramadan and stockpiling by some consumers," he said.

Zohurul Islam, business manager of ACI Limited, said the current stock of soybean oil in the country should be sufficient for about a month.

"So far, we have not increased prices, and there should be no need to do so within the next 15 to 20 days. However, if crude oil prices rise in the global market, it will inevitably have an impact everywhere," he said.

Strict monitoring urged

SM Nazer Hossain, vice-president of the Consumers Association of Bangladesh, said the issue cannot be blamed solely on consumers.

"During such situations, many dealers and retailers also start hoarding products, which creates artificial shortages and allows them to sell at higher prices," he said.

Nazer urged the government to conduct inspections of warehouses to check if there is any case of hoarding.

"According to our estimates, there are about six months' worth of crude sugar and edible oil either in stock or in the import pipeline. Since these products also require time for refining, there is no question of a real shortage. This appears to be an attempt to create an artificial crisis to raise prices," he added.