The commerce ministry sits with edible oil refiners today to find the reasons behind soaring soybean oil prices.
Depending on the brand, the retail price of five litres of packed soybean oil stands at Tk 514-560 from Tk 464-494 earlier, traders said yesterday. The price of loose soybean oil crossed Tk 100 a kilogram.
According to retail price data by Trading Corporation of Bangladesh, the price of loose soybean oil rose 10 percent to Tk 98-102 a kilogram, compared to a month ago.
The commerce ministry convened the meeting with refiners at a time when the High Court directed the government to submit a report in four weeks on the quantity and price of soybean oil imported in the last six months.
The court also asked Vegetable Oil Refiners and Vanaspati Manufacturers’ Association to furnish a report within the time on the quantity of soybean sold on the domestic market.
Commerce Minister Faruk Khan said he called the meeting because he should know why refiners are raising local prices despite adequate supplies.
“I served notice on Rupchanda and Meghna to know why the prices of those two brands went up steeply on the local market over the last three months.”
“I instructed Bangladesh Tariff Commission to prepare a report on whether the price hike in the local market was proportionate to the hike in the international market,” Khan said.
Since the beginning of November, the price of loose soybean started rising ahead of Eid-ul Azha, when consumption of edible oil usually rises. The price of packaged soybean oil however remained stable prior to the festival.
After Eid, edible oil refiners hiked the prices of soybean oil, which is mostly import dependent.
They justified the hike saying they adjusted the prices in line with the international market price. Some refiners claimed that they even counted losses from selling soybean oil before Eid to respect a government call not to increase prices.
Shoeb Md Asaduzzaman, head of sales and marketing of Bangladesh Edible Oil Ltd (BEOL), said the imported price of packaged soybean oil that the company is currently selling was $960-$980 a tonne previously.
He said the company sold a five-litre container at Tk 434 when a tonne on the international market was $700.
Now a tonne on the international market costs $1,180, said Asaduzzaman. “We did not adjust the price as much as on the international market.”
“We could not raise the price before Eid as we were abiding by a government call. We sold soybean oil by counting losses at that time,” he told The Daily Star.
“We had no alternative but to raise the price to trim losses. We faced losses worth Tk 14 crore in the first 10 months of 2010.” Asaduzzaman blamed the price rise on the international market and unfair competition.
On why they raised the price by Tk 13 a litre at one go, he said the price hike would not be felt if they could have increased the price before Eid.
Globally, the price of soybean oil and palm oil soared since the middle of this year amid fears of a fall in output in major growing areas, such as the US, along with strong demand in China and higher production of biofuel.
