Shortage of edible oil: A crisis stuck in blame game

Highlights

• Traders charging Tk15-20 more per litre than the fixed price of Tk175
• Tariff Commission says edible oil imports increased by 25% in January
• 150,000 tonnes of oil aimed for Ramadan await clearance
• Traders claim sales reps are not fulfilling orders
• Refinery companies claim they increased supply by 25%

Edible oil imports through Chattogram and Mongla ports in 2024 increased by nearly 17% compared to 2023, yet the market is experiencing a severe shortage of bottled soybean oil, particularly one- and two-litre bottles.

Oil refinery companies are claiming that they have boosted their supply to the market but traders disagree, saying the companies are supplying less than the demand.

Recently, the Bangladesh Trade and Tariff Commission (BTTC) stated that there is no actual shortage of edible oil in the market, terming low availability of soybean oil in the market as artificially created. 

According to market analysts, suppliers are deliberately restricting supply in anticipation of the holy month of Ramadan, when demand for soybean oil surges.

The situation has prompted the Trade and Tariff Commission to launch a field-level investigation as traders are charging Tk15-20 more for per litre of bottled soybean oil amid the crisis, whereas government-fixed retail price is Tk175 per litre that has been in effect from 9 December last year.

The commission decided to monitor the market situation through the National Consumer Rights Protection Directorate and the district administration.

Amid the uncertainties, Commerce Adviser Sk Bashir Uddin, while speaking at a programme at the Secretariat in Dhaka on Wednesday, said the edible oil market would stabilise within seven to ten days.

However, despite the assurances from the commission and government, consumer rights groups remain skeptical.

Shortages of edible oil have been reported not only in Chattogram and Dhaka but also in small and large retail shops across different upazilas. 

However, on 9 February, the Tariff Commission stated that the unavailability of bottled soybean oil was artificial. In a press release, the commission confirmed a 35% increase in edible oil imports, with Letters of Credit (LCs) rising too. 

They also stated that the supply of bottled soybean oil has increased by nearly 25% in January this year, compared to the same month in 2024.

Data from Chattogram Custom House shows that crude palm oil and crude soybean oil imports through the Chattogram port reached 560,176 tonnes in 2024, up from 478,673 tonnes in 2023 – an increase of 81,503 tonnes.

But, despite the increase in imports, traders report that they are not receiving adequate oil supplies from company sales representatives.

According to the traders, sales representatives are not taking orders as per the demand of shop owners. They claimed many shops have not even seen sales representatives since 10 January.

Manik Chandra Das, owner of Manik Store, a large grocery shop in Mithachhara Bazar in Mirsharai Upazila, said, "There has been a shortage of one-litre bottled soybean oil for over a month. We are receiving less than 25% of our ordered stock."

"We have no oil in stock and as of Wednesday evening, we have not seen a single sales representative from any company," he added.  

He further said sales representatives have claimed reduced supply from their companies as the reason for failing to meet market demand.

According to the National Board of Revenue (NBR), the highest volume of edible oil is imported through Chattogram port, while Mongla Seaport also handles a significant portion of imports. Nearly 14 companies, owned by a few industrial groups, control the entire edible oil import market. 

Suppliers deny crisis, blame middlemen

On 9 February, the Trade and Tariff Commission held a meeting with oil importers and distributors. The companies claimed there was no supply crisis, asserting that soybean oil distribution in January had increased by 25% compared to the same period last year. 

They blamed market disruptions on middlemen.

However, Tariff Commission Deputy Chief (Trade Policy Division) Md Mahmudul Hasan told TBS, "Based on import and production data, there should not be a shortage. The companies deny any market manipulation, yet consumers are facing supply issues. We are launching a field-level investigation to identify the cause."

The commission also stated that approximately 150,000 tonnes of edible oil are awaiting import clearance ahead of Ramadan. Refinery companies have assured that prices will remain stable.

Consumer rights groups skeptical

Despite assurances from the Tariff Commission, consumers and retail traders remain unconvinced as the supply crisis persists, with buyers struggling to find essential cooking oil.

SM Nazer Hossain, vice president of the Consumers Association of Bangladesh (CAB), told TBS that creating an artificial shortage during Ramadan is an old tactic by producers and their suppliers.

He said, "They manipulate the market in collusion, shifting blame while squeezing money from consumers."

"The Tariff Commission has also failed to take effective action. They only monitor the market and investigate causes while millions are siphoned away. None – neither the commission, the producers, nor the suppliers – can evade responsibility for this artificial crisis," he added.

Meanwhile, City Group Director Bishwajit Saha said the company was unaware of any supply shortage. 

He said, "Our imports and supply have increased compared to last year. The commission should investigate the real reason behind the crisis."