Shortage of Bottled Soybean Oil Triggers Market Instability

As soon as the month of Ramadan begins, a tendency for the prices of essential commodities to rise is usually seen in the country. This time has been no exception. Over the past week, complaints have emerged about a decline in the supply of bottled soybean oil in the market, creating concern among consumers and retail traders.

Retail traders say that the reduced supply has created instability in the market, and many are fearing that the price of oil may increase further. However, importers claim that there is no shortage in the market and that supply is continuing as usual.

About 90 percent of the country’s total demand for edible oil depends on imports. Around 3 million tons of edible oil are imported annually. Of this, approximately 1.5 million tons are palm oil and about 1 million tons are soybean oil. Under normal circumstances, the monthly demand for soybean oil is about 150,000 to 160,000 tons.

Currently, a five-liter bottle of soybean oil is being sold in the wholesale market at around 930 taka. In the retail market, the same bottle has been seen selling for 940 to 950 taka. At the beginning of Ramadan, the price of five-liter soybean oil bottles from different companies ranged between 915 and 920 taka. Over the past week, the price of bottled oil has increased by 10 to 15 taka. At the same time, the price of loose oil has also increased by about five taka per liter.

Visits to markets in Karwan Bazar and Mirpur-11 in the capital Dhaka showed that the supply of bottled soybean oil is relatively low. Many retailers said they are not receiving oil bottles from wholesalers according to demand.

Sumon Mia, owner of Sumon Store in Mirpur-11 market, said that the country usually has enough soybean oil stock to meet several months of demand. Nevertheless, at various times supply is reduced on different pretexts in an attempt to increase prices.

Monsur Islam, owner of Arifa Store in Karwan Bazar, said that after opening a letter of credit (LC) to import edible oil from abroad, it takes at least two months for the shipment to reach the country. Therefore, the argument that supply has suddenly decreased due to any recent international situation is not realistic.

On condition of anonymity, a dealer said that since oil prices did not increase much during Ramadan, some traders are reducing supply as a strategy to raise prices in the market ahead of Eid al-Fitr.

Meanwhile, Abul Kasem, owner of Sonali Traders in Karwan Bazar, said that bottled oil of some brands is not available in the wholesale market. In particular, the supply of Teer and Rupchanda brands is comparatively lower. He also said that a five-liter bottle of Teer canola oil is already selling for more than 1,000 taka.

On the other hand, Taslim Shahriar, AGM of Meghna Group of Industries, an importing company, said that oil is being supplied to the market as before. He even claimed that more oil is being supplied daily compared to the previous month.

According to consumers, the prices of products were relatively stable at the beginning of Ramadan this year. However, sudden complaints about a decrease in the supply of bottled oil have created fresh concerns in the market. Many have called for stronger government monitoring to keep the market stable.