The rate of imports and letter of credit (LC) openings for edible oils in Bangladesh’s consumer market has suddenly declined. Large industrial groups have taken a precautionary stance, causing this drop in imports of daily essentials, including soybean and palm oil. Prices of edible oils fluctuate daily in the global market, but steps are not being taken to coordinate prices in the domestic market through regular communication between the government and traders. As a result, entrepreneurs are not actively opening LCs according to the demand for edible oils, considering the risks.
According to the Bangladesh Trade and Tariff Commission (BTTC), the country’s annual demand for edible oils is around 2.4 million tons, with monthly demand reaching nearly 300,000 tons during Ramadan. Major importers said that in the first two months (July–August) of the current FY 2025-26, at least 400,000 to 450,000 tons of edible oil should have been imported, combining soybean and palm oil, for which LCs were required. Yet during this period, LCs were opened for only 100,000 tons. While palm oil is imported in refined form, after opening LCs, it takes roughly two to two-and-a-half months to bring soybean oil into the country, refine it, and then release it into the market.
Analysis of National Board of Revenue (NBR) data shows that in the first two months (July–August) of FY 2025–26, a total of 400,000 tons of refined palm and unrefined soybean oil were cleared from ports after customs assessment. In the same period of the previous fiscal year, this figure was 350,000 tons. Currently, nearly all edible oil imports are handled by TK Group, City Group, and Meghna Group of Industries (MGI).
Importers said international prices of soybean and palm oil have been rising for several months. Unusual global price hikes have created doubts among them. If the government fixes product prices and fails to update them in line with global rates, importers will face substantial losses. This lack of confidence, the importers say, is the main reason why the rate of LC openings for edible oil imports has fallen sharply over the past two months.
Shafiul Athar Taslim, Director of TK Group, told Bonik Barta, “In the past two months, international prices of soybean and palm oil have suddenly risen. In June, the price of soybean oil per ton was nearly $1,000; now it has reached $1,200. Without regular monitoring from the government at the end of each month, there is no way for traders to bring in oil and store it in warehouses. They have to complete banking and other financial arrangements first.”
He added, “Since the government is controlling prices, import data must be updated every month to coordinate pricing. If international prices rise, domestic prices should also rise; if they fall, they should be reduced here as well. Without timely price adjustments, we incur significant losses. Based on calculations, there is still a shortfall of at least 200,000 tons of edible oil relative to the LCs opened. If LC openings in September and October do not match demand, there will be a major crisis before Ramadan.”
Palm oil can be imported in refined form and sold directly in the market, but this is not possible with soybean oil. After customs clearance, it must be stored at tank terminals. Then it is sent to factories for refining, and the entire process takes roughly two to two-and-a-half months before it reaches the market.
Imports of wheat, the country’s second-largest staple, have also declined. The annual domestic demand for wheat is 7 to 7.5 million tons. About 15 percent of this is produced domestically, with the remainder imported.
According to the National Board of Revenue (NBR), in the first two months of the current fiscal year, a total of 613,000 tons of wheat were cleared through customs. In the same period of the previous fiscal year, the figure was 752,000 tons. This represents a drop of more than 18 percent in wheat imports during this period. Around 65 percent of the wheat imported into Bangladesh comes from Russia and Ukraine.
Amirul Haque, Managing Director of Delta Agrofood Industries, told Bonik Barta, “Analyzing the purchasing power of middle- and lower-middle-class consumers gives some perspective, because demand for wheat among these groups has increased in the past. At the same time, Russia, a major source of our wheat imports, has faced supply chain obstacles at its ports. Meanwhile, international prices of edible oils are high. There is no guarantee that after importing oil at these elevated prices, refining it, and selling it domestically, price coordination will be accurate. As a result, there is extreme caution in opening LCs for edible oil imports to avoid potential losses. The gaps between international prices and domestic coordination with traders need to be addressed.”
Although the import rate of edible oil and wheat has declined, sugar imports have increased. Traders in this sector say that because global raw sugar prices have remained stable, domestic import supply has also been consistent. Additionally, monitoring of sugar smuggled across the border has intensified compared with the past. As a result, legally imported sugar, cleared through customs and taxes, now aligns with domestic demand.
NBR import data analysis shows that in the first two months of the current 2025–26 fiscal year, 233,000 tons of raw sugar were imported. In the same period of the previous fiscal year, imports totaled 133,000 tons. This represents an increase of nearly 42 percent.
Locally produced sugar accounts for only around 1 percent of total demand. The country imports roughly 2 to 2.2 million tons of sugar annually. The domestic sugar market is almost entirely dependent on imports. Companies including Meghna Group, City Group, S Alam, Deshbandhu, and Abdul Monem import raw sugar and refine it for distribution in the market.
Mostafa Kamal, Chairman and Managing Director of Meghna Group of Industries (MGI), told Bonik Barta, “Global sugar prices are stable. In the case of wheat, there was a delay of 15–20 days last month because shipments did not arrive on time due to congestion at Russian ports.”
On the edible oil import situation, Mostafa Kamal said, “If you look at neighboring countries, when global prices rise, government monitoring ensures that local market prices also increase. Similarly, when global prices fall, local edible oil prices are reduced. All that is needed is to coordinate domestic prices with global rates. This keeps supply and demand in the edible oil market balanced. As for the government’s suggestion to average prices, how is that possible! Each importer purchases at different prices. Competition exists among edible goods importers. Therefore, traders cannot sell goods at an average price when they were bought at different costs.”