Global edible oil prices are on the decline, particularly the price of crude soybean oil, which has fallen for several consecutive months. However, domestic tariffs and market instability have kept the retail price of the staple rising. Despite the global drop in soybean prices, traders are maneuvering to raise the price of both bottled and loose soybean oil. The supply shortage persists because importers’ price hike proposals have not yet received final government approval.
While the global booking price of crude edible oils such as soybean has decreased, palm oil prices have risen slightly. Recently, the National Board of Revenue (NBR) imposed a 1 percent source tax on edible oil imports, which pushed the domestic price up by BDT 120–140 per maund (37.32 kg) within a few days. Mill owners have proposed raising the price of bottled soybean oil by BDT 10 per liter. Rumors of this increase have created supply gaps in the market channels, particularly at the dealer level, where businesses are unable to procure enough bottled soybean oil from mills, leading to shortages in the retail market.
In Khaturganj, the country’s largest wholesale market for consumer goods, investigations revealed that a month ago, loose refined palm oil was priced at BDT 5,900 per maund (37.32 kg). Following discussions about an official price increase, the price has risen by BDT 140 per maund, trading between BDT 6,030 and BDT 6,040. Meanwhile, soybean oil prices have increased by nearly BDT 150 over the same period, reaching BDT 6,800 per maund. Even as global soybean prices fell, attempts to raise bottled and loose soybean oil prices, combined with supply shortages, have prevented wholesale and retail prices from declining.
Wholesale and retail traders report that several rounds of meetings took place between mill owners and the Ministry of Commerce regarding the proposed price hikes for soybean and palm oil. Although the issue was discussed, no final decision has yet been made. In anticipation, many mill owners have stopped supplying bottled soybean oil to dealers nationwide. Additionally, several mills have reduced their supply over the past few weeks. As a result, the prices of palm and soybean oils have risen. The imbalance between supply from mills and market demand for bottled soybean oil has created a per-liter shortage in the market.
Retail and wholesale traders have complained that, amid the government’s proposed price increases, mill owners are unwilling to supply bottled soybean oil at previous prices to avoid losses. As a result, many mills have not issued Delivery Orders (DOs) to dealers, even when they submitted demand letters. This has created varying degrees of soybean shortages in wholesale and retail markets. Meanwhile, some suppliers are providing previously packaged edible oils to traders at higher prices in anticipation of an official price increase. Traders acknowledge that to maintain profits, they are selling the oil at prices above the original packaging cost at the retail level.
When asked, Golam Mawla, president of the Bangladesh Wholesale Edible Oil Traders’ Association, told Bonik Barta, “During the process of raising edible oil prices, global prices have fallen. Whether a price hike is necessary now will be considered by the Ministry of Commerce. For loose edible oils, prices fluctuate based on supply and demand. But if mill owners do not supply bottled soybean oil, it negatively affects the market. Importers often reduce supply during price hikes to pressure the government.”
The World Bank’s Pink Sheet commodity price report on October 2 showed that from July to September, global crude soybean prices fell by BDT 145 per ton. The global booking price of soybeans was $1,307 per ton in July, $1,245 per ton in August, and $1,162 per ton in September. Meanwhile, the price of crude palm oil rose slightly to $1,038 per ton in September.
The decline in global crude edible oil prices has also been reflected in the Ministry of Commerce’s recent commodity price report. According to the report dated September 24, the price of crude soybean fell by $78.71 per ton compared to September 17, trading at $1,032 per ton. Similarly, crude palm oil fell by $10 per ton to $1,072. Most recently, on October 3, the booking price of soybean ranged from $1,020 to $1,023 per ton, while palm oil fell further to $1,050–$1,055 per ton. Following the decline in global booking prices, wholesale traders have indicated that domestic prices may also decrease.
Several traders from different areas of Chattogram reported that for the past two weeks, the supply of edible oil in the market has been below demand. During the Durga Puja holiday, demand increased slightly. During that period, soybeans and palm oil were sold at slightly higher prices due to the supply shortage. However, as the festival demand subsides, the market is no longer experiencing a shortage despite limited supply. With global prices declining, mill owners have slightly increased edible oil supplies over the past few days. Still, adequate supply, as in normal times, has not yet been achieved. They believe that unless the government finalizes the proposed price increase, the edible oil supply shortage will not be fully resolved.
When asked, Biswajit Saha, Director of Corporate and Regulatory Affairs at the City Group, told Bonik Barta, “Apart from imposing source taxes on imports, a proposal has been made to adjust the long-standing prices of edible oils in line with global price increases. Whether prices will rise or fall will be determined by the Ministry of Commerce. Regardless of the decision, mill owners are continuing regular supplies. As a result, edible oil purchased at higher prices is still being supplied at previous rates.”
For context, the last increase in bottled soybean oil prices was on December 9, 2024. Back then, the price was set at BDT 175 per liter. Although a day later, in response to traders’ demands, the advance import duty (AIT) on soybean imports was cut by 5 percent. Importers of palm oil still benefit from this AIT provision.