Palm and soybean oil have been getting cheaper on the international market, but none of that has reached Khatunganj in Chattogram, one of the country's largest wholesale markets. Prices there have gone the other way, with traders taking at least Tk 300 a maund more and citing a shortage of supply.

According to the World Bank's commodity price data, the Pink Sheet, released on 2 September, palm oil averaged ,117 a tonne internationally in August, against ,104 in June and ,101 in July. That puts the June-August average at ,107.33, about 1.34 or 1.9 per cent below the April-June average of ,128.67.

Soybean oil shows the same trend. Prices in April, May and June were ,643, ,781 and ,740 a tonne, an average of ,721.33. In June, July and August they were ,740, ,658 and ,638, an average of ,678.67 — about 2.67 or 2.5 per cent lower.

Against those falling averages, Khatunganj is now selling soybean oil at about Tk 7,500 a maund (37.32 kg), palm oil at Tk 6,600 and super palm oil at about Tk 6,800. Market sources said soybean oil was about Tk 7,200 a maund only six weeks ago, a rise of roughly Tk 300 or 4.2 per cent; traders said palm oil has risen by about the same amount in the same period.

Shahjalal, a soybean oil trader at Khatunganj, said supply to the market is comparatively thin. "The dealers are supplying, but it is less than the demand, so the price has gone up," he said. Retail has followed: loose soybean oil is selling at Tk 208 to Tk 210 a kilogram, palm oil at Tk 175 to Tk 180 and super palm oil at Tk 190 to Tk 195.

About 90 per cent of the country's edible-oil demand is met by imports, so the exchange rate, freight, port and transport costs, duties and taxes, banking costs, refining and packaging all shape the local rate alongside the world price. Ala Uddin, an importer at Khatunganj, said comparing the international price with the domestic wholesale rate means looking at the whole cost structure from import to Khatunganj, not at the price a tonne alone.

Chattogram customs figures show 65,956 tonnes of edible oil imported under the relevant HS code between July and 23 September — 50,896 tonnes of palm oil, about 77.1 per cent, and 15,061 tonnes of soybean oil, about 22.9 per cent. Assistant commissioner Sharif Mohammad Al Amin said customs mainly keeps import data and that market rates depend on supply and various commercial factors.

The government has adjusted the soybean oil price twice this year: on 29 April a one-litre bottle went from Tk 195 to Tk 199, five litres from Tk 955 to Tk 975 and loose soybean oil from Tk 176 to Tk 180; on 2 September the maximum retail price of a one-litre bottle rose another Tk 5 to Tk 204 and five litres to Tk 1,000. S M Nazer Hossain, central vice-president of the Consumers Association of Bangladesh, said Ramadan is coming. "It needs watching whether excuses for a price rise are being built up from now," he said.

The report is by Dhaka Post's staff correspondent in Chattogram.

Source: Dhaka Post