Palm oil sells at Tk30 above revised retail rate as wholesale prices surge

Despite a recent price cut by the government for loose palm oil by Tk19 per litre following a price drop in global market, the revised rate has yet to be maintained in the local market. On the contrary, prices have risen both at the wholesale and retail levels, raising concerns over artificial market manipulation.

The government on 12 August reduced the retail price of loose palm oil from Tk169 to Tk150 a litre.

However, at Chattogram's Khatunganj, the country's largest wholesale market for consumer goods, the price of palm oil has surged by nearly Tk300 per maund within the past month. Currently, consumers are paying as much as Tk180 per litre at the retail level — Tk30 higher than the government-fixed price.

The upward trend in palm oil prices is also impacting the entire edible oil market. Over the past week, soybean oil prices in Khatunganj have increased by Tk100 per maund, reaching Tk6,500.

Wholesale traders allege that major trading companies (SO suppliers) have intentionally reduced supply, creating an artificial shortage. This, they say, has caused wholesale prices to spike by Tk150 to Tk300 per maund. On Saturday, palm oil was selling in Khatunganj for Tk5,980 to Tk6,000 per maund, up from Tk5,840 just a week earlier.

An analysis of recent global booking prices supports the trend of rising costs. In July, the price of crude palm oil increased to $975 per tonne, compared to $935 in June and $908 in May. Meanwhile, soybean oil prices rose even more sharply — from $1,163 per tonne in May to $1,178 in June, and then to $1,307 in July. Between June and July alone, the price of soybean oil rose by $129 per tonne, while palm oil increased by $40.

Speaking to The Business Standard, Golam Mowla, president of the Bangladesh Wholesale Edible Oil Traders' Association, said, "Edible oil prices have remained high in the country for quite some time. Although the government adjusted domestic prices in line with international trends, supply at the mill gate was subsequently reduced, and trading companies began selling at inflated rates — ignoring the official price cut."

Commenting on the issue, Md Abzur Razzaque, additional secretary at the commerce ministry, said, "The government has determined oil prices based on overall market conditions. If there are any deviations, action will be taken in consultation with the Tariff Commission."