Mizanur Rahman, a resident of Shewrapara in the capital, left his house on Saturday morning to buy a bottle of soybean oil. Initially, he searched for soybean oil in three grocery stores in his neighborhood. Failing to find any, he went to the Shewrapara market. After visiting four stores there, he finally bought a 5-liter bottled soybean oil.
Mizanur Rahman told Prothom Alo, "I needed a 2-liter bottle, but I couldn’t find it at any store. In the end, I was forced to buy a 5-liter jar, and that too after visiting several stores. I don’t understand why there’s suddenly such a shortage of oil."
Not just in Shewrapara, but in many places across the capital, there has been a shortage of bottled soybean oil. Currently, the retail price of bottled soybean oil hasn't increased, but the price at the dealer or supplier level has gone up. The prices of loose soybean and palm oil have also risen.
Sellers have mentioned that the supply of bottled soybean oil has been relatively low for a month. The shortage has worsened over the past three to four days. On one hand, oil companies have been releasing relatively less oil to the market, and on the other hand, due to the war in the Middle East, many buyers are purchasing more oil than necessary out of fear. All of this combined has created a crisis in the market.
What was seen in person:
On Saturday morning at the Mohammadpur Krishi Market, 5-liter bottles of soybean oil were available at most grocery stores, though in limited quantities. The 1- and 2-liter bottles were available in just a few stores. Apart from the brands Pusti, Rupchanda, Bashundhara, and Fresh, other brands of soybean oil were hardly seen.
When asked, Humayun Kabir, the owner of Khokon General Store at the Krishi Market, said, "The situation with oil is very bad. Until two or three days ago, we could still get a reasonable amount of oil from the dealer. Now, there’s hardly any bottled soybean oil."
Humayun mentioned that under normal circumstances, he would bring in 8-10 cartons of oil from the dealer each day. But for the past few days, he's been able to bring in just two to three cartons, and that too at a higher price.
A vendor from the Shewrapara market, Abdul Hakim, said that due to the war in the Middle East, many buyers think there might be an oil shortage in a few days. So, those who needed one bottle are buying two. Plus, with Eid shopping, there’s additional pressure on supply.
On Saturday afternoon at Karwan Bazar, visits to the stores of three brands’ soybean oil dealers showed that retailers from various areas were flocking in. Most buyers could not purchase the amount of oil they needed.
While sitting at a dealer’s store, I spoke with Md Palash, a seller from the Moghbazar area. He said, "I needed four cartons each of 5- and 2-liter bottles. But the dealer gave me only one carton of each. He said they'd give more tomorrow (Sunday). But it won’t be cost-effective to hire a rickshaw for such a small amount. Yet, there’s no other option."
Prices have increased at the dealer level:
The last price increase for bottled soybean oil was on December 7th last year. At that time, the maximum retail price (MRP) for a 1-liter bottle was set at 195 taka after a 6-taka increase per liter, and the MRP for a 5-liter bottle was set at 955 taka. Since then, companies have not increased the MRP. However, recently, the price at which retailers buy oil from dealers or suppliers has gone up, reducing retail profit margins.
Sellers mentioned that the labeled price (MRP) for a 5-liter bottle of soybean oil is Tk 955. They previously bought this oil from the dealer for 930 taka and sold it for 940 taka, making a profit of 10 taka.
But for the past three or four days, they’ve been buying 5-liter bottles for Tk 950 and selling them for Tk 955.
This means the dealer-level price has increased by Tk 10, reducing retailers’ profits by Tk 5. Additionally, consumers now have to buy soybean oil at Tk 5-10 more than before.
A seller at the Mohammadpur Town Hall Market, on the condition of anonymity, mentioned that 1- and 2-liter bottles of soybean oil are very scarce. Meanwhile, some sellers are selling 1-liter bottle for Tk 220-230, even though the maximum retail price is Tk 190.
Price increase of loose soybean oil:
Amid the supply shortage of bottled soybean oil, the prices of loose soybean and palm oil have increased. In the wholesale market, loose soybean oil is sold by the kilogram. Over the past four days, the price of loose soybean and palm oil has increased by Tk 5 per kilogram.
On Saturday at Karwan Bazar, wholesale loose soybean oil was sold at Tk 198-200 per kilogram. Four days ago, the price was Tk 193-195. On Saturday, loose palm oil was sold at Tk 170 per kilogram, up from Tk 165 four days earlier.
What the companies are saying:
Regarding the supply shortage of edible oil, Mohammad Yasin, a dealer for two brands of soybean oil at Karwan Bazar, said, "The supply of oil from edible oil companies has decreased. We are selling all the oil the companies are releasing. There’s no hoarding incident. If the companies increase supply, we can sell more."
However, the country’s edible oil companies have denied there being a supply shortage in the market. They claim that the production and supply of edible oil remain normal.
An official of Meghna Group of Industries, speaking anonymously, said that their supply from the mill gate has not decreased. The production and storage of oil are also in good condition. The war in the Middle East has not yet impacted the oil market. Therefore, there are no problems from their side. He couldn’t explain why there is a shortage in the retail market.
The National Directorate of Consumer Rights Protection monitors the prices and supply of essential commodities in the market.
When asked, the Director General of the agency, Farooq Ahmed, said, "We will investigate the issue of the supply shortage."