Edible oil price heats up despite significant global drop

The price of palm and soybean oil has dropped drastically by at least Tk200-250 per maund in the international market in the past two and a half months, but the commodity is still selling at a higher rate in the domestic market.

Although the booking price is decreasing every day,  the price of cooking oil has been rising by Tk200-300 per maund in the domestic market for the past two weeks, according to traders.

Even currently, in the wholesale markets, traders are selling edible oil from Tk1000 to Tk1200 higher than the purchase price.

Edible oil traders of Khatunganj wholesale market of consumer goods said as soon as the price of edible oil goes up in the international market, importers increase the price in the domestic market without any delay. But when the global price drops, it does not make any effect on the local market even for a few months.

However, edible oil importers said due to the normal production and supply in producing countries, the prices in the international market decreased slightly in the last six months, but the consumers of the country did not get that benefit due to the increase in the exchange rate of the dollar.

According to Investing.com, the international market on Thursday, the booking rate of unrefined palm oil was $920 per tonne. In the first week of January, the booking rate for palm oil was $967.

Analysing the international market, it has been found that the booking rate of soybean oil was $1,481 on Thursday, which sold at $1540 in mid-January and even $1,548 in the third week of February. In the last two and a half months, the price of palm oil and Soybean oil fell by $47 and $67 per tonne in the global market.

Meanwhile, the consistent global price fall of edible oil has no effect on the domestic market. Instead, the price of the commodity is rising in the domestic market ahead of the month of Ramadan.

Khatunganj edible oil trader Aman Ullah, the owner of M/s Aman Enterprises, and the importers have been selling edible oil at a price of Tk1000 higher than the international market for the last six months citing the rising price of US dollars.

In Khatunganj, the big wholesale market of consumer goods, palm oil was sold for Tk5,000, and soybean oil was sold for Tk6,800. The two types of cooking oil were sold at Tk4,700 and Tk6,600 two weeks ago.

Traders think that the supervision of the concerned government agencies is necessary to calm down the edible oil price.

Bishwajit Saha, executive director (corporate affairs) of Citi Group, an edible oil importer, said "Import costs have increased due to the increase in the exchange rate of the dollar although the prices of oil decreased slightly in the international market."

Products that are currently available in the market were bought at higher prices earlier. As a result, even though the price has dropped in the global market, importers are unable to reduce the price. Oil prices will drop when the products booked at lower prices reach the market, he added.

According to the data of the National Board of Revenue, in the last three months (December 2022-February this year), 1.65 lakh tonnes of soybeans and 2.70 tonnes of palm oil have been imported into the country. In December-February of the 2021-22 fiscal year, the country imported 2.45 lakh tonnes of soybeans and 2.77 lakh tonnes of palm oil.