Rush of old supply orders affects edible oil supply
According to government rules, importers have to supply edible oil from mill gates within 15 days of the issuance of an SO
With a sharp rise in edible oil prices, traders are rushing to use their expired supply orders (SOs), but millers are procrastinating to supply. Some are charging extra money for providing oil against old SOs, thus creating chaos in the supply system.
From 5 May, the government set new prices for edible oil at the retail and wholesale levels, increasing the price of soybean oil by Tk38 per litre – a move that has affected the supply chain of edible oil.
But, with the price increased, traders were seen scrambling to oil factories with date-expired SOs on Tuesday.
According to government rules, importers have to supply edible oil from mill gates within 15 days of the issuance of an SO. For this reason, trading companies, DO traders and traders who buy DO stocks at the wholesale level are in trouble with the long-standing SOs.
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In Khatunganj, the largest wholesale market for consumer goods in the country, per maund (40.90 litres) soybean oil is being sold at a wholesale price of Tk7,500 and at the SO level at Tk7,000.
Palm oil is being sold at a wholesale price of Tk7,000 and at the SO level at Tk6,500. Palm Super Oil is selling at a wholesale price of Tk7,200 and at the SO level at Tk6,800.
But the price set by the government is higher than the wholesale market price at present.
On Tuesday, about 50 trucks were seen waiting with empty drums of edible oil at the mill gate at S Alam Group's edible oil refinery area in Kulgaon under Anwara Upazila.
Truckers waiting at the gate said since Eid-ul-Fitr, they have had to return several times as there was no supply of edible oil. Millers are delaying supply to drivers who have brought old SOs, even though supply started on a limited scale from Saturday.
Md Firoz, a trucker, said he could not collect soybean and palm oil even after coming to the mill gate every day after Eid with SOs. The traders pay Tk2,000 per day if they are unable to supply oil at the mill gate. But Tk2,000 is not a good payment for him.
Another trucker, Usman Gani, said the officials concerned were procrastinating in supplying oil to the drivers who came with old SOs. But some SO buyers were seen taking the supply of oil with old SOs by paying an extra amount of between Tk50,000 and Tk100,000.
Traders said they could not collect edible oil with old SOs within the deadline of 8 May due to a delay in a supply of the kitchen ingredient against old SOs.
On the same day, in the mill area of VOTT Oil Refineries Limited, owned by Citigroup in the Patenga area of Chattogram, it was seen that at least 30 trucks were waiting at the mill gate to collect edible oil but the mill authorities were not supplying the product.
According to representatives of the buyer organisations, collection of edible oil is being delayed as they have been going to the mill gate with the old SOs.
Emdadul Haque, an edible oil trader in Khatunganj, said the importers of edible oil sold SOs at different times and took hundreds of crores of taka from traders. Thus, Khatunganj's SO or DO business has been going on for a long time.
"But this time, due to the increase in the price of oil to more than the SO rates, officials of the importing companies are delaying supplying the product with old SOs. Different companies are supplying oil by taking extra money," he added.
Pradeep Karan, deputy general manager (Sales) at Citigroup, an edible oil importer, said there have been directives from the consumer rights agency recommending not supplying oil with long-standing SOs. The companies had set a deadline of 8 May on the supply of oil with old SOs. But even then many traders, who did not receive a timely supply of oil, are now insistent about their demand being met.
"Even then we are supplying oil without taking extra money from any SO buyer," he added.
Syed Sagir Ahmed, general secretary of Khatunganj Trade and Industries Association, said if anyone has a long-standing SO, he will collect the oil after discussing it with mill owners.
He said edible oil prices have remained stable in the wholesale market even after the government fixed the prices.
Due to strict monitoring by the government, he added, there is no chance of irregularities in the supply and marketing of edible oil at the level of importers and traders.
