As edible oil jars had started vanishing from the grocers' shelves during the past few days, consumers suspected yet another rise in prices of the food item. Their suspicion has turned out to be true. The hike in oil prices that came into effect on Thursday last was beyond their imagination. The ministry of commerce, following a meeting with the traders on that day, announced the revised prices of edible oil prices, souring the consumers' festive mood. The price-increase was by a record margin.
The edible oils, however, continues to be scarce even after the announcement of their revised rates at the retail level. Consumers are expecting a radical improvement in the supply situation this week with distributors and wholesalers releasing their stock of cooking oils. But prices are likely to maintain a punishing level.
Consumers, rightly or wrongly, do not hold the traders dealing in essential commodities in high esteem. The former often accuse the latter of wrongdoings. But if cooking oils continue to be scarce in the local market even after the latest price-hike, there should be a reason to be worried. Maybe the relevant importers refrained from opening letters of credit (LCs) in recent months at higher prices, fearing a backlash from the consumers at home or price control by the government.
As far as the supply and prices of edible oils are concerned, the situation has never been as critical as it is now. Bangladesh meets most of its cooking oil requirements through import. The supply of cooking oils in the international market has been low for the past few months. Before the start of the Ukraine war, the prices of this item recorded a 20 per cent rise, mainly because of crop failure in major soybean oil-exporting countries.
The war only added fuel to the fire, because of the supply crunch of sunflower oil from Ukraine and Russia, two leading producers of the item. As if to make the situation worse, Indonesia, the largest producer of palm oil, imposed a ban on the export of palm oil in the last week of April. Bangladesh largely depends on Indonesian palm oil for meeting its need for edible oils.
It is natural for businesses to sell their products in line with their production or procurement costs and make some amount of profit. But hoarding or making an excessive profit at the cost of consumers can never be justified. Besides, traders here have a strong propensity to raise prices of goods instantly in the event of any hike in their international prices. But they hardly do the same if international prices showed a downward trend.
The fact remains that the international cooking oil market is volatile and it might remain so for some more time. A supply crunch could also push up the prices of this essential further. Undeniably, the situation remains tricky for the government. Ensuring an adequate supply of cooking oils in the market should be the government's priority. The scarcity of any daily essential is far more damaging than its higher price. Authorities also need to examine all possible ways of offering some amount of price comfort to the consumers.