Bottled soybean oil supply still scarce in Dhaka

Bottled soybean oil is still not available as usual in markets across Dhaka, despite the government's Tk8 hike per litre on 9 December, nearly a week ago.

The scarcity of soybean oil has lasted almost a month, following price hikes by refining companies in response to rising global prices of soybean and palm oil. 

Reports from areas such as Kalyanpur, Karwan Bazar, and Hatirpool yesterday revealed the ongoing shortage.

After discussions with the Ministry of Commerce, the price of bottled soybean oil was raised to Tk175 per litre, up from Tk 167, while the price of loose soybean oil increased to Tk157, from Tk149.

Following a meeting with edible oil traders, Commerce Adviser Sheikh Bashir Uddin said, "The price of soybean oil in the international market has increased by 20%, prompting local small businesses to stockpile. Many expected further price hikes, which led to hoarding. Based on a practical analysis of the overall situation, the new price was set."

The adviser also confirmed that a shortage of edible oil supply continues, with the new prices taking effect from today [yesterday].

Ali Hossain, a sales assistant at Yasin General Store in Karwan Bazar, said, "Bottled soybean oil is still not available as usual. We cannot obtain the quantities we need from wholesalers. We require 50 litres of oil daily, but we only receive 20 litres. Even when we pay, we can't get wholesale oil. My store has run out of soybean oil."

Yesterday afternoon, after visiting around 30 stores in Karwan Bazar, it was found that most shops had some soybean oil, but retailers complained about insufficient supplies to meet demand.

Mohammad Hridoy, a vendor at Satata General Store, said, "Larger stores that sell more get more oil. When an oil truck arrives, everyone rushes to buy it. The shortage of soybean oil continues." At his store, there were around 15 bottles of 5-litre and 2-litre soybean oil.

At Salam Store, only one 5-litre bottle of soybean oil remained. Vendor Mohammad Saad said, "What we had sold out by midday. Now, customers want 2-litre bottles, but I can't provide them. Our sales have dropped as customers leave without buying other products."

A visit to around 10 shops near the Kalyanpur bus stand revealed that the supply of bottled soybean oil had yet to return to normal. 

Md Alamgir Hossain, a grocer at the BRTC market, said, "I have got only 10 bottles of 2-litre soybean oil. Wholesale suppliers say the supply will gradually normalise."

The Business Standard made multiple attempts to contact Biswajit Saha, director of Corporate Affairs at City Group, a major edible oil importer, but he did not respond to any phone calls.

According to the Trading Corporation of Bangladesh, bottled soybean oil was sold for Tk168-170 a year ago.

Now sunflower, canola oil get import tax exemption, VAT reduction

The government has exempted import tax and lowered value-added tax (VAT) to 5% on sunflower and canola oil, aligning it with other edible oils.

This reduction, outlined in a Statutory Regulatory Order issued by the National Board of Revenue (NBR) on Sunday, which officially published yesterday, will remain in effect for three and a half months.

The existing import tax and reduced VAT rate for soybean and palm oil has also been extended until 31 March, as part of efforts to increase supply and stabilise the market for essential cooking oils, according to a press release of NBR issued yesterday.

In the past, VAT was levied on imports, local refining, and trading stages at a reduced rate.

"Previously, through two orders issued in October and November, import tax exemptions and reduced VAT benefits on soybean and palm oil were valid until 15 December. To stabilise the edible oil market and keep prices affordable, sunflower and canola oil have now been added to this list," says the NBR press release.

As a result, the import cost of sunflower and canola oil could decrease by up to Tk50 per litre, it further mentioned.

At present, Bangladesh imports only a small quantity of sunflower and canola oil, as these oils are significantly more expensive than soybean and palm oil.

Due to rising prices of soybean and palm oil, local edible oil importers are considering increasing imports of sunflower and canola oil.

An NBR official said VAT revenue from these oil imports is minimal, around Tk2 crores for the last fiscal year.

Importers said VAT is reduced further, they might import more sunflower and canola oil, potentially lowering their prices.