Wholesale edible oil prices have jumped once again in the third week of December while the cooking essential already ended November at a record high price.
After the latest hike, a maund (around 37 kilogrammes) of soybean oil now costs Tk4,000 in Chattogram's Khatunganj – one of the country's largest wholesale commodity hubs. The rate in the last week of November was Tk3,700.
In other words, the wholesale price of the edible oil has spiked by Tk300 per 37 kilogrammes in the last three weeks.
Traders said edible oil prices have spiked on the local market owing to the rising prices on the international market and a hoarding mentality. Though the imports are still normal, many importers and traders are stockpiling the item amid fears of Covid-19's second wave.
In the last three months, soybean's alternative, palm oil, is also showing a rising price trend as the item rose to Tk180 per maund.
During winter in Bangladesh, demand for soybean oil usually rises while both the price and demand of palm oil drop. However, though palm oil demand is low at this time, the price of the item is still soaring.
At present, a maund of soybean oil is $40 on the international market. Adding 15% value added tax (VAT) and other expenses, the rate is at Tk3,900. After arriving on the local market, the item subsequently stands at Tk4,000.
Similarly, each tonne of palm oil is being sold on the international market at 3,600 Malaysian ringgits. Adding VAT and other expenses, the purchase price stands at Tk3,400, and Tk3,520 to Tk3,570 on the local wholesale market.
Khatunganj traders say many countries might go under lockdown as virus cases surge amid the second wave. Different nations have already cut off international communication – which hurts import-export chains. Following this, many importers and traders have been racing to hoard the items, raising the prices despite oil imports to Bangladesh remaining normal.
When contacted, Khatunganj oil trader Gias Uddin said the soybean price usually remains within Tk3,000 per maund. The price goes up by several hundred taka in winter due to the rise in demand.
"However, market volatility has been exacerbated this year due to the pandemic. The soybean oil price has already reached Tk4,000 – surpassing all previous records," he added.
The pandemic-led movement restrictions destabilised the market of consumer items. Market supply started to normalise in July as lockdowns in other countries were relaxed.
However, the market concerned said the country's imports are still paltry compared to the increasing global trend to stock foods to meet respective regional demands and future crises.
In the meantime, Khatunganj oil traders said several top edible oil importers and refining mills of the country are struggling with the demand.
They also point a finger at the government as it does not have a complete picture of the actual demand, production, import, and net supply of an item.
A number of retailers in Chattogram said all the edible oil companies have raised their bottled and packaged soybean oil prices by Tk20 per litre in the last two weeks.
Two weeks ago, TK Group's Rupchanda Soybean Oil was Tk108 per litre which is now at Tk130. The price of two-litre Rupchanda bottled oil has been raised to Tk240, which previously was Tk218.
Similarly, a three-litre bottle now costs Tk370 and five-litre bottle Tk625 – which were Tk320 and Tk565 respectively.
Khatunganj oil retailer Moktar Alam and several others complained that the companies were overcharging for oil compared to the price hike in wholesale.