Halt market manipulation of edible oil prices

The government fixed the price of edible oil on Tuesday, but this has had an adverse impact on the market. The traders did not sell the oil at the fixed rates. In fact, the edible oil of most companies simply vanished from the market. This is a matter of concern.

At the meeting of the national committee on essential commodity marketing and distribution held on Tuesday at the secretariat, it was decided that soybean oil (loose) will be sold at Tk 135 per litre. And palm super will be sold at Tk 104 per litre. The price of bottled soybean oil (5 litres) will be Tk 630.

Commerce minister Tipu Munshi expressed his hope that edible oil would be sold at the fixed prices. However, consumers were disappointed when they went to the market and found that oil was not being sold at the fixed prices. Traders in the capital city’s Karwan Bazar, Mirpur Section 1 market and the Mohammadpur Town Hall market said that the oil of certain brands have been in short supply over the past few days. The edible oil in the shops is from previous stock and so is being sold at higher prices. There were only four 5-litre bottles in three shops of the Karwan Bazar kitchen market. The other shops had none.

According to the government’s Trading Corporation of Bangladesh (TCB), soybean oil (loose) was sold in the retail market at Tk 116 to Tk 120 per litre on Thursday. That is higher than the prices fixed by the government.

The annual demand for edible oil in the country is around 2 million tonnes. Around 500,000 tonnes is produced locally and the rest is imported. Around seven or eight companies, including Meghna, City, Bangladesh Edible Oil, Basundhara, TK, S Alam Group and others, import and refine unrefined oil. Some large companies import edible oil. They are accused of creating a syndicate and inflating the prices. In this case, more companies should be given the opportunity to import edible oil. This will step up competition and curtail unwarranted price hikes.

When the government fixes the price of any commodity, that price must be ensured. In a free market, monitoring must be stepped up without any force or pressure. And the state-run TCB must also be put to use.

The holy month of Ramadan is around the corner. The demand for edible oil, chickpeas, sugar and spices will spike. Preparation must be taken in advance otherwise there will be a crisis as was in the case of onions last year. Many traders had hoarded onions, creating an artificial crisis in the market. This must not be repeated.

The general market rule is higher supply means lower prices. Lower supply means higher prices. If the market is to be kept stable, supply must be increased and monitoring strengthened. Alongside the price of oil, the prices of rice and almost all other essentials is on the rise. The government should look into whether there are any market manipulations behind the scenes and take steps accordingly.