Edible oil crisis deepens ahead of Eid

The continuing woes for consumers over the lack of availability of cooking oil have deepened as retail stores in Dhaka and the rest of the country are reportedly out of stock, just a day ahead of Eid-ul-Fitr.

Some grocers have complained dealers at Mirpur Shah Ali Market, Mohammadpur Krishi Market, and Karwan Bazar, the largest wholesale market in the country, refused to sell to them soybean and palm oil in bulk in the last two days.

As a result, the retailers cannot sell the favourite cooking oil to the customers who, out of desperation, have been buying mustard oil, sunflower oil and rice bran oil instead.

Though the government has already waived the value-added tax on imports of cooking oil to rein in prices, the retailers alleged they were forced to buy from dealers at a higher rate.

After analysing import costs and the state of the local market, the government decided to set a higher price ceiling by hiking the rate of soybean oil ahead of Ramadan.

Bottled soybean oil was priced at Tk 160 per litre, while the rate for loose soybean oil was Tk 140. And the price of palm super oil was fixed at Tk 130 per litre.

However, some retailers, who did not want to reveal their identities, had said they were able to purchase bottled soybean oil at over Tk 200 per litre, and they are selling it to consumers at an even higher price.

Tipu Sultan, a retailer at Dhaka’s Pirerbag, said he was forced to stop selling soybean oil as he had run out of stock for the last two days.

Another retailer Mohsin Islam said he has selling loose soybean oil at Tk 181 per litre and palm oil at Tk 171 per litre.

“Dealers are refusing to give invoices for the sale of oil. If we (grocers) insist, they even decline to make the sale,” he said.

Abdur Razzaque, the owner of Rakib Store in Karwan Bazar, said he has stopped selling soybean oil and palm oil for the last two days due to unavailability.

Mohsin also said some of his fellow retailers have deposited cash at one dealer store for the sale and have been asked to collect the oil from another store at a different market.

Consumers have been alleging that a cartel of traders created instability in the market, which sent the prices of loose soybean oil soaring by up to Tk 50 a litre.

According to reports, some traders sought to capitalise on the situation by pouring out soybean oil from bottles and selling them loose.

The government stakeholders have been saying that the businesses took advantage of ongoing volatility on the global market amid the Russia-Ukraine war to raise the prices of old stocks.

Monjur Mohammad Shahriar, a director of the Directorate of National Consumer Rights Protection, said his team has been working relentlessly throughout Ramadan to break the cartels, by conducting raids in different wholesale markets.

“We found that some traders and dealers have been hoarding cooking oil to maximise their profits when they would feel the price has reached the peak,” he said.

“We’ve recovered a stock of 2,000-litre soybean oil from a trader named Bismillah Traders, which have been refusing retailers claiming they were out of stock for the last few days.”

“We’ll force the owners to keep the shop closed for a month as punishment,” Shahriar said.

Five days ago, Abdur Rahim, the owner of Bismillah Traders, said that they had not been receiving any supply of cooking for the last seven days.

Only six mills refine or produce edible oil, including soybean oil and palm oil, to the domestic market.

However, the owners of those mills have always maintained that they are at 100 percent capacity and that they do not see any change in production or sales from their side.

When contacted, Deputy Adviser of Meghna Group Mohammad Shafiur Rahman said the mills were not involved in the crisis over the oil supply and it is up to the government to find out who is responsible for the crisis.