Edible oil traders betrayed govt’s trust: Tipu Munshi

Commerce Minister Tipu Munshi has said traders betrayed the government's trust and created an artificial shortage in the market by hoarding soybean oil.

"Believing the traders on their word was a mistake. Mill owners kept their word but retailers and wholesalers took advantage of the situation," the minister told reporters after a meeting with soybean oil vendors at his office in the secretariat on Monday.

"They knew beforehand that prices were slated for an increase…So they stocked previously purchased oil in order to sell them at a higher price later," he added, expressing dissatisfaction over the recent volatility in the edible oil market.

When Tipu Munshi was addressing the press conference, the Directorate of National Consumer Rights Protection was carrying out raids at various markets in Dhaka and Chattogram.

In Chattogram, the rights protection agency recovered 15,000 litres of stockpiled soybean oil from one Siraj Saudagar's shop in Pahartali market of the city on Monday.

The shop was fined Tk1.70 lakh for secretly hoarding soybean oil and storing expired products.

Some 29,580 litres of edible oil purchased previously was recovered from three establishments in Kajla Bridge area of ​​Demra in the capital.

Thousands of litres of cooking oil were seized in raids in Dhaka and Chattogram on Sunday.

Soybean oil disappeared from the retail market a week before Eid. Later, with the consent of the Ministry of Commerce, mill owners increased the price of soybean oil by Tk38 per litre and fixed it at Tk198. But, the cooking staple remained out of market even after the price hike.

According to the Directorate of National Consumer Rights Protection, traders have illegally stockpiled some 40,000 tonnes of soybean oil in 10 days to make extra profits. 

At the press briefing, Tipu Munshi said, "The retail and wholesale traders who have taken advantage of the situation have already been identified and action is being taken against them. But the problem is they are many in number."

Mill owners also have to monitor such unscrupulous dealers, and their dealerships should be scrapped, the minister added.

AHM Safiquzzaman, Director General of the Directorate of National Consumer Rights Protection, told TBS, "The drives will be further intensified."

Tipu Munshi said the edible oil prices have gone up on the international market, so it will go up in our country as well.

"This price hike was supposed to happen before Ramadan but the government did not want to increase the price then. At that time, some unscrupulous dealers and retailers stockpiled oil, triggering a fake crisis in the market," he said.

"After fixing the price in February, it was necessary to revise the price again in the wake of the increase in the global market," the commerce minister said.

Tipu Munshi had requested mill owners to delay the price hike to some extent so that people do not suffer during Ramadan.

"Now I feel that it would have been better to increase the price during Ramadan. Although the mill owners agreed, the retailers and wholesalers did raise the price," he added.

According to commerce ministry sources, the minister had also requested traders not to increase the price of edible oil during Ramadan.

He assured them that a new price would be fixed in coordination with the international market on the first working day after Eid.

Meanwhile, the global oil market saw growing instability. Argentina announced to slash soybean oil exports, and Indonesia stopped palm oil exports entirely. That is why the price of soybean oil has skyrocketed during Ramadan.

Giving a comparative picture of some neighbouring countries, the commerce minister said the current price of bottled soybean oil in Bangladesh is Tk198 per litre, at the same time in India it is around Tk224.75 in Bangladeshi currency, in Pakistan it is around Tk238.69 and in Nepal Tk214.75.

"The truth, no matter how difficult, must be accepted," he said, referring to the recently hiked price of soybean oil in accordance with the global price.

"The supply of edible oil at subsidised prices through Trading Corporation Bangladesh (TCB) is underway," Tipu Munshi said.

"During Ramadan, one crore low-income families in the country have been provided with essential commodities including edible oil at subsidised prices. From next June, edible oil will be supplied to one crore families at subsidised price," the minister said.

City Group Chairman Fazlur Rahman said the mill owners were not responsible for the price hike and shortage in the market.

"With the sudden decision to increase the price of soybean oil on 5 May, retailers created a crisis in the market," he said, adding that there are ample stocks of cooking oil which will be available in a day or two.

At present, the price of crude soybean oil in the international market is $1,983.20 per barrel, which is 35% higher than it was a year ago, and the price of crude palm oil is $1,947 per barrel, which is 48% higher than the previous year.

According to the ministry sources, when the soybean oil of the above mentioned price hit the market, the price of per litre soybean can go up to around Tk250.

The commerce ministry said the country needs some 20 lakh tonnes of edible oil annually, 18 lakh tonnes of which are imported. Up to March of 2021-22 fiscal year, the import volume was 13.81 lakh tonnes, which was 13.49 lakh tonnes in the same period last year.

As the global supply of edible oil was disrupted, the commerce ministry proposed to the National Board of Revenue (NBR) to reduce tariffs on canola and sunflower oils.

On the other hand, due to the effects of the Russia-Ukraine war, various countries including Belgium, Germany, Canada and the United Kingdom are selling oil by rationing to face the global supply crisis, the commerce minister said referring to a report of The Guardian newspaper.

Meanwhile, the supply of cooking oil in different markets of the capital has not been completely normal yet. Apart from some large markets, there is still an oil crisis in the shops of Dhaka's neighbourhoods.