Edible oil prices have been rising over the past week in the local market, as grocers say they are not getting enough supplies from the cooking oil companies.  

Amid the supply shortage in the retail market, soybean and palm oil refiners have proposed the authorities review the prices, which were raised just a month ago.         

To be specific about the latest price rise, the price of a one-litre bottle of soybean oil has increased by 1.46 percent, according to the state-run Trading Corporation of Bangladesh (TCB) under the commerce ministry.

In the case of a one-litre bottle of palm oil, the price has increased by 0.31 percent.

In other words, bottled soybean oil was sold for Tk 173 to Tk 175 per litre yesterday -- up from Tk 168 to Tk 173 a week ago.

As for palm oil, each litre was sold for Tk 162. It was Tk 159 a week ago.

After analysing the prices of crude soybean and palm oil in the global market, it is necessary to adjust the prices in the domestic market, according to refiners

On January 6, the Bangladesh Vegetable Oil Refiners' and Vanaspati Manufacturers' Association requested the commerce ministry to adjust prices of soybean and palm oil in tune with the global market.

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Edible oil prices up by Tk 8 per litre

The association also mentioned that they submitted the proposal as per a decision of its meeting with the Ministry of Commerce last month.

After analysing the prices of crude soybean and palm oil in the global market, it is necessary to adjust the prices in the domestic market, it said in the letter.

The price adjustment is necessary to ensure a normal supply of the key item during the upcoming holy month of Ramadan, it mentioned in the letter.

As per the decision of the last meeting, the price adjustment is scheduled to take place on January 10.

The government on December 9 raised the retail prices of soybean and palm oil by Tk 8 per litre. The price of bottled soybean oil was set at Tk 175, and loose soybean oil and palm oil at Tk 157.

The new rates came into immediate effect and, according to decisions taken at a meeting between ministry officials and industry leaders, the prices would be readjusted every month.

The decision to raise the prices came amid a supply crunch. Millers said they reduced imports as costs had gone up despite tax cuts.

The government had earlier reduced the value-added tax (VAT) on the import of soybean and palm oil twice since October 17, finally taking it to 5 percent from 15 percent.

Mohammad Bablu, a retailer in Karwan Bazar, one of the largest kitchen markets in Dhaka, said the supply of edible oil in the kitchen market increased slightly after the government increased the prices.

But since then, the supply situation again worsened, he said.

He explained that his shop has a daily demand for 400 litres of bottled soybean oil, but he was getting about 250 to 300 litres from refiners.

Bablu informed that one of the country's top edible oil brands meets 70 percent of his shop's demand, while all the others have fallen behind.

Md Shafiul Ather Taslim, director for finance and operations at TK Group, a leading importer and commodity processor marketing the Pushti brand, told The Daily Star, "We approached the government for price adjustments."

"The government will analyse our import costs. Then the price may increase or decrease," he said.

"I can't immediately say whether the price will increase or decrease. The government will collect the information from Bangladesh Bank and Bangladesh Customs. Then they will analyse the prices," he said.

Bangladesh meets more than 90 percent of its edible oil requirement through imports, according to the commerce ministry data.