Edible oil market heats up despite global price decline

The price of edible oil has been on the rise in the domestic market, although its price has come down a lot in the international market.

In the international market, palm oil price came down by Tk309 per maund in the last week, but instead of decreasing, its price has gone up by Tk450 in the domestic market.

Traders said despite the reduction in booking prices in the international market, the price of edible oil is increasing at Khatunganj, the largest wholesale market for consumer goods in the country, due to manipulation by importers and wholesalers.

On Tuesday, per maund (40.90 kg) of palm oil was sold at Tk5,050 in Khatunganj, which was Tk4,600 only a week ago. As such, the price of per maund of palm oil has gone up by Tk450 in a week.

According to traders, at present, TK Group's Bay Fishing Palm Oil is selling at Tk5,050 per maund, S Alam's at Tk5,040 while City Group, Meghna Group and Bashundhara Group's palm oil at Tk5,030 per maund.

Along with palm oil, the price of palm super oil has also gone up by around Tk500 per maund. One week ago, per maund of palm super oil was sold in the market at Tk4,700, which is now selling at Tk5,200.

Currently, TK Group's palm super oil sells at Tk5,200, S Alam's at Tk5,190 and other groups' (Meghna, City and Bashundhara) palm super oil at Tk5,180.

At present, per maund of soybean is being sold in Khatunganj at Tk5,460, which was sold at Tk5,000 a week ago, increasing by Tk460 per maund in a week.

Commenting on the reason behind the rise in edible oil prices in the domestic market, Abdur Razzak, an edible oil trader in Khatunganj and also the proprietor of Messrs Ismail Traders, said, "The price of edible oil in the international market has come down by Tk300-Tk400 in the last one week, but instead of decreasing, its price increased in the domestic market. The edible oil market has once again become volatile due to local trade conducted by a syndicate of importers and wholesalers." 

Local trade means that the product is repeatedly sold from one hand to another, he explained.

According to tradingeconomics.com which provides data on economic indicators and financial markets, per tonne of palm oil was sold at Tk1,04,966.04 in the international market on 3 November. Adding a cost of Tk10,000 per tonne, the purchase price of per maund of palm oil stood at Tk4,979. 

After a week, on Tuesday, per tonne of palm oil was sold at Tk97,858.11, decreasing by Tk7,107.94. As such, the price of palm oil came down by Tk309 per maund in the last week. But instead of decreasing the price of the product in the domestic market, it has increased by Tk450.

Similarly, a week ago, soybeans were sold at $1,400 per tonne in the international market, which is currently being sold at $1180. As such, the price of soybean oil in the international market has come down by $220 per tonne in the last week.

According to the information above, the booking price per maund of soybean oil in the international market was Tk5,276 last week. It is now being sold at Tk4,511, decreasing by Tk765 in a week. But, instead of decreasing, the price of soybean oil in the domestic market has increased by Tk460.

Regarding the price hike, Mohammad Alamgir, proprietor of edible oil importer RM Trading, said, "It is true that the price of edible oil in the international market has come down a bit in the last week. However, the edible oils that are being sold in the market now were imported earlier. The products that are being booked at present will take at least one more month to reach the market."

The importer thinks that it will take at least two to three weeks for the price of edible oil to come down in the local market.

However, Zia Uddin, an edible oil trader in Khatunganj, said, "If the booking price of any product increases in the international market, the price of the product increases immediately in the local market. But when the price of that product decreases in the international market, its price in the domestic market does not decrease easily."

"It so happens because the edible oil market in the country is being held hostage by a handful of importers," the trader alleged.