Edible oil: Prices can only fall in line with global trend

"The reduction of crude edible oil prices in international markets has not reached a level that requires us to reduce prices in local markets now."

Commerce Minister Tipu Munshi yesterday said the reduction of edible oil prices in local markets is predicated on whether the international prices of crude cooking oil fall further.

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Crude soybean oil sold for between $1,401 and $1,584 per barrel yesterday while the same amount cost about $1,650 to $1,700 per barrel one month ago in different futures markets.

Last month, the government fixed the price of bottled soybean oil at Tk 160 per litre at the retail level considering $1,450 per barrel as the base price in international markets, Munshi said.

"However, the reduction of crude edible oil prices in international markets has not reached a level that requires us to reduce prices in local markets now," he added.

The commerce minister went on to say that a further price reduction of edible oil in local markets depends on the fall of crude cooking oil prices in Brazil, Malaysia and Indonesia.

Munshi was speaking at a press conference after a meeting of the first taskforce that was formed last week to monitor the basic commodities markets.

He also said the current stock of edible oil in Bangladesh is nearly 90,000 tonnes, which is adequate to serve the local market.

Munshi informed that the home ministry has assured him of stopping extortion of goods-laden trucks as rent seeking by a section of people is considered one of the major causes for the price hike of basic commodities in local markets.

Regarding the hike of vegetable prices, the commerce minister said it is not so simple to reduce the prices of widely consumed vegetables as the price of those items depends on many issues, including transport costs and depreciation of the goods.

He said the government may consider carrying such goods via railway in the future so that prices can be controlled by reducing transportation costs.

Munshi said the government wants to strengthen the capacity of the Trading Corporation of Bangladesh (TCB) so that the people can buy essential goods at affordable prices. The TCB currently controls 30 per cent of the basic commodities market, he added.

AHM Shafiquzzaman, director general of the Directorate of National Consumer Rights Protection, said he called some refiners to a hearing last week as they were found to be involved in the unusual supply of edible oil in local markets, which affected the price level.

A few other refiners will also be called to a hearing soon as they too were found to be engaged in distorting the supply of edible oil.