Wholesale palm oil price drops

Highlights:

• Price of palm oil per maunde at the wholesale level:

• Current price: Tk3,800
• Last week's price: Tk4,500.

• Price of palm super oil per maunde at the wholesale level:

• Current price: Tk4,000
• Last week's price: Tk4,600.

• Palm oil price started dropping after the new season's palm seeds came to market
• Local importers, fearing a further price drop, are selling palm oil at a price lower than the purchase price
• soybean oil price has remained unchanged in the wholesale market for the past 1 month

After creating several records of high prices, palm oil price has dropped by around Tk700 per maund in a week in Khatunganj, one of the country's largest wholesale markets for consumer goods in Chattogram.

Edible oil traders said the price of the product has come down due to lower booking prices in the international market and increased supply in the domestic market.

Edible oil traders in Khatunganj said at present each maunde of palm oil is being sold at Tk3,800 at the wholesale level, which was also sold at around Tk4,500 last week.

At present, the prices of TK Group's palm oil is Tk3,800 per maunde, S Alam's palm oil is Tk3,790, and City Group, Meghna Group and Bashundhara Group's palm oil is Tk3,780, the traders said.

Meanwhile, the price of palm super oil in the market has also come down by Tk600 per maunde. Last week, each maunde of palm super oil was sold in the market for Tk4,600, which is currently being sold at around Tk4,000.

Currently, TK Group's palm super oil sales at Tk4,000 per maunde, S Alam's oil at Tk3,990 per maunde, and City Group, Meghna Group and Bashundhara Group's palm oil at Tk3,980 per maunde.

However, soybean oil price – around Tk4,800 per maunde – has remained unchanged in the wholesale market for the past one month due to low sales.

According to the edible oil traders of Khatunganj, the market of edible oil, especially palm oil, is declining in the international market. The new season's palms have been coming to the market in Malaysia for the last one and a half to two months. The current booking price of per tonne palm oil, which previously reached around Tk98,198, has come down to around Tk69,629. This means, the booking price for palm oil has dropped by Tk1,260 per maunde during that period.

"The decrease in palm oil price has increased the import and supply of the product in the domestic market. As a result, the price of the product has come down here," said Ziaul Haque, proprietor of Khwaja Ajmer Traders in Khatunganj.

According to the IndexMundi, the price for palm oil in the international market began to rise in September 2019. At that time each tonne of palm oil was sold at Tk49,723. Its price began to rise since then and each tonne of palm oil was sold at around Tk98,198 till May this year. Then the palm oil price started decreasing gradually after the new season's palm seeds came to market.

City Group Executive Director (Corporate Affairs) Biswajit Saha told TBS that the local importers are worried about a sudden drop in palm oil prices. The traders fear that the price may drop further, so they are forced to sell their products at a price lower than the purchase price.

He further said the purchase price of palm oil which is currently being sold at Tk3,800 per maunde at Khatunganj or oil mill gates, is at least Tk4,200-4,400 per maunde. In other words, palm oil is being sold in the domestic market at Tk400-500 less than the purchase price.

According to the Customs House, Chattogram, around 6.52 lakh metric tonnes of refined and crude palm oil was imported through Chattogram port in the first nine months of the current financial year (July to March). During the same period in the last fiscal year, palm oil imports were around 10.90 lakh metric tonnes.

In the first nine months of this fiscal year, 4.33 tonnes of soybean oil was imported, while during the same time in the last fiscal year, 3.95 lakh metric tonnes of refined and unrefined soybean oil were imported.