Edible oil prices and stubborn traders

Edible oil prices and stubborn traders

The edible oil prices in the international market after reaching their record levels in May last, started declining and those are now about to return to 2020 levels. Traders are hopeful about a further slide in edible oil prices in the coming months. That is a piece of welcome news in these days of economic hardship. Very high edible oil prices have been hurting the consumers most.

Newspaper reports about falling edible oil prices are only soothing to the ears of the poor consumers. Nothing more, as the prices of this essential kitchen item are still sticking to their previous highs in Bangladesh. Old habits die hard. Traders here have not moved an inch from their tradition---hike the prices of imported items, instantly, if their global prices are up, drag your feet as far as possible when the development is in the opposite direction.

The commerce ministry, which is often accused of taking a stance favourable to traders, had asked the refiners before the Eid days to reduce edible oil prices by Tk.06 a litre. But the latter has not complied with that order. A litre of bottled soybean oil is still being sold at Tk 205. 

The situation is altogether different in neighbouring India. Traders of that country, in keeping with the declining trend in prices of both palm and soybean oils in the international market, have brought down their prices thrice since May 23 last. The price of soybean oil has declined by Rs. 31 a litre in that country.

It is a pity that the commerce ministry is reluctant to take a tough stance when it comes to protecting the interests of millions of consumers. It did not bother to see whether its directive has been complied with or not. The situation remains the same with the Ministry of Food where millers are also getting an upper hand.

Edible oil refiners are reportedly unwilling to bring down their prices because of the declining value of the Taka against the greenback. They claim that they are now forced to buy US dollars at a 20-25 per cent higher rate from the informal forex market. Higher shipping cost is another reason they cite in support of their inability to reduce prices of edible oils.

Neither of the reasons does hold water. India is also witnessing an erosion in the value of its currency. But that could not hold back the Indian traders from cutting edible oil prices by a reasonable margin. Higher freight is also not tenable at this stage, for the shipping cost had gone up soon after the strike by the SARS-CoV-2 in 2020. It is not a fresh development.

Inaction by the relevant ministries during such a difficult situation only gives rise to deep frustration among the millions of consumers. The government has cut duties on both edible oils and rice. But the onus is on the ministries of commerce and food to ensure a positive result from the cut in duty. It is not at all acceptable that importers/traders would enjoy the fruits of duty-cut while consumers are made to pay through the nose for most of the essential items.

 Visits by mobile teams, headed by executive magistrates, are unlikely to deliver results, as far as high prices are concerned. The government will have to deal with the biggies who call the shot, as far as import and supply of essentials are concerned. Relevant agencies should seek answers from the refiners/importers to a few pertinent questions. If they cannot give a proper reply, take them to task under the law of the land.

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