Wholesale edible oil price rises as booking price drops in global market

In the last two weeks, the price of palm oil has gone up by Tk700 per maund in the wholesale market of Khatunganj in the port city of Chattogram.

Traders said the product's price has been increasing in Khatunganj due to the manipulation of importers and wholesalers even after the demand has stabilised and the booking price of the product has decreased in the international market.

A maund (37.3 kg) of palm oil was sold at Tk4,500 on Saturday in the wholesale shops of Khatunganj, one of the largest wholesale markets of consumer products, where it was sold at Tk3,800 only two weeks ago.

At present, TK Group's Bay Fishing Palm Oil is being sold at Tk4,500 per maund, S Alam's palm oil at Tk4,490 and City Group, Meghna Group and Bashundhara Group's palm oil at Tk4,480 per maund, said the traders.

Along with palm oil, palm super oil's price has also gone up by around Tk400 per maund. Two weeks ago, each maund of palm super oil was sold in the market at Tk4,200, but currently its price is Tk4,600 per maund.

Currently the TK Group is selling palm super oil at Tk4,600 per maund, S Alam at Tk4,590, and other companies like the City Group, Meghna Group and Bashundhara Group are selling their palm super oil at Tk4,580.

Soybean oil's price in Khatunganj on Saturday was Tk4,850 per maund, which was Tk4,600 two weeks ago. The price has risen by Tk250 per maund in the last two weeks.

Wholesale edible oil traders and importers said the prices of edible oil, especially palm oil, have come down in the international market in the last four-five days, so the price of edible oil was supposed to come down in the domestic market as well. But instead, the price of the product has increased abnormally over the past two weeks.

The traders complained that the edible oil's price has gone up due to the manipulation of importers and wholesalers in the local trade, where the product is sold from one to another.

Edible oil trader Abdul Hannan, owner of Khwaja Ajmer Traders in Khatunganj, said palm oil's price in the domestic market had dropped by Tk500-700 per maund last month. At the same time, the price of palm super oil and soybean oil also went down by Tk200-300 per maund. But over the past two weeks, the price of edible oil in Khatunganj has started rising again.

According to IndexMundi, Palm Oil was sold at $1,015.50 per tonne in the international market on 21 August. In January this year, each tonne of palm oil was sold for only $990. The price gradually increased to $1,019 in February, $1,030 in March, $1,078 in April, $1,156 in May and then again dropped to $1,017 in June.

At present, each maund palm oil's booking price is Tk3,939 including expenses, but it is currently being sold at Tk4,500. That means the importers are making a profit of Tk560 on a maund of palm oil.

According to the Malaysian Palm Oil Council's website, one tonne of palm oil's price in Malaysia on 19 August was 4,238 ringgit (Tk84,980.69), and on 13 August 4,511 ringgit (Tk90,454.91).

In just six days since 13 August, the price of each tonne of palm oil in Malaysia has dropped by 273 ringgit (Tk5474.22), but in the domestic market, the product's price has increased.

Importer Mohammad Alamgir, owner of RM Trading, said it was true that edible oil prices had declined slightly in the international market last week, but the edible oils that are currently being sold in the market are previously imported products. The products that are booked currently will take at least one more month to reach the market.

 He thinks that it will take at least two to three weeks for the edible oil's price to come down in the local market.

Meanwhile, Zia Uddin, an edible oil trader in Khatunganj, said if the booking price of the product increases in the international market, the price of the product increases in the local market too. But the decrease in a product's price in the international market does not easily affect the product's price in the domestic market.

The trader alleged that the edible oil market was being held hostage by a handful of importers in the country.