Oil dearth holds back TCB sales again

The Trading Corporation of Bangladesh (TCB) has deferred the sales of daily essentials to 1 crore poor families at subsidised rates from 16 June as the edible oil mills did not supply the required soybean oil to the government, according to officials.

For the subsidised sales, the state-owned TCB in May asked the mills to supply 2.50 crore litres of soybean at Tk192 per litre – less than the Tk198 retail price at the time. But the millers did not respond to that.

They have now agreed to supply the oil after the commerce ministry raised the price of the edible oil on 9 June.

Although it is not yet finalised when the TCB sales would begin, TCB Chairman Brigadier General Md Ariful Hassan told The Business Standard that 1 crore poor families would get the essentials before Eid-ul-Azha, the second largest Muslim festival to be celebrated in the second week of July.

The TCB sales were supposed to begin on 16 June and continue till 30 June. Earlier, the corporation announced that sales in the capital would begin on 16 May, but suspended them at the last minute.

Commerce ministry officials said the government would distribute 2kg of lentils, 2 litres of soybean oil and 1kg of sugar at subsidised prices before Eid-ul-Azha to each family that has a family card.

As the millers refused to supply oil at Tk192 per litre, the TCB subsequently readjusted the tender price to the maximum retail price of Tk198. But the mills did not agree to that move till Wednesday last week, saying they had already been in negotiations over the price hike with the government.

On Thursday, the commerce ministry raised the price of bottled soybean to Tk205 per litre. Then the mills agreed to supply oil at the mill-gate rate of Tk195 per litre. But the supply has not reached the TCB yet.

TCB needs 2.50 crore litres of edible oil. At present, it has a stock of 21 lakh litres, which can meet only 10% of demand.

In the wake of the uncertainty over soybean oil supply, the corporation was advised to buy rice bran oil by the commerce ministry. The corporation is in the process of purchasing 5,000 tonnes of oil directly from the country's rice bran oil mills.

The corporation informed the commerce ministry that it had 20,000 tonnes of lentils and 10,000 tonnes of sugar in stock, which was sufficient to meet demand.

In a letter to the commerce ministry on 8 June, the corporation expressed concerns over implementing the subsidised sales successfully due to complications over edible oil procurement.

Earlier, Commerce Minister Tipu Munshi offered an explanation to reporters about the suspension of TCB's sales from 16 May. He said sales would start after family cards for the poor were readied in Dhaka and Barishal.

Previously, anyone could buy edible oil and other essentials from the open truck sale. However, now only family cardholders will be able to buy the subsidised products during the special food drive.