Supply shortage of edible oils on the local market turned severe to the frustration of consumers ahead of the Eid-ul-Fitr festival, market sources say.
As virtual anarchy reigned over oil marketing, 5-litre jar almost disappeared from the groceries while the supply of 1-litre and 2-litre bottled soybean oil is inadequate even though the price is much higher than the government-fixed rate.
Many distributors of big companies, however, were found forcing grocers to buy other consumer products of the same company if they wanted to purchase branded edible oils.
The alleged move of push sale discouraged many retailers from taking bottled edible oils as demand for the products the distributors forcing to take is too low and hence made a strong bite onto the profit margin of the grocers.
As a result, the supply of the essential cooking ingredient is getting squeezed and its unavailability frustrates the consumers.
To overcome the possible profit loss, some of the grocers raise prices of edible oils as they have been forced to sell other products having low market demand.
The FE correspondents found the facts while visiting Monday many areas of the capital city, Dhaka. They also found supply shortage of both loose and branded oils while prices of the widely-consumed cooking oil ever so high.
Market insiders said that Indonesia, world's largest exporter of palm oil, recently announced that it will stop exporting all kinds of cooking oil.
Indonesia's announcement to halt palm-oil export led to a sharp rise in cooking-oil prices in the country's wholesale markets, they also said.
Both loose and branded bottled oils were selling at almost same rate while there was clear shortage of oil in most of city groceries.
Though the government had fixed maximum retail price (MRP) of bottled soybean oil at Tk 160 a litre, loose soybean Tk 137 a litre and loose palm oil at Tk 130 a litre, the products' MRPs were found at Tk 165, Tk 172 and Tk 165 a litre respectively in groceries and vendor shops.
Loose soybean was even far pricier than that of bottled ones while palm-oil price increased almost to the level of bottled soybean oil.
Prices of loose edible oils showed notable rise again in last one week after showing a decline in March last. Price of loose soybean oil shot up to Tk 170-172 a litre (Tk 180-185 a kg) while palm oil to Tk 160-165 a litre (Tk 172-178 a kg).
However, soybean crude price was US$ 1830 a tonne (FOB) on April 24, according commodity web-portal 'business.insider.' The portal showed price having increased by 5.1 per cent in a week, 34 per cent in six months and 48.21 per cent in last one year.
According to the refiners, the DO (delivery order) prices at mill gate for 1-littre loose soybean oil and 1-littre palm oil were Tk 132-Tk133 and Tk 127 respectively.
Md. Kabir Akand, proprietor of Tania General Store at East Rampura, said the companies had stopped delivering supply of the bottled and packed soybean oil for the last couple of months.
He said distributor of City Group came recently to take orders on condition of buying more products of the same oil- supplying company in addition to the edible oil.
"The distributor told us to buy 5-litre jar of soybean oil at Tk 750 and sell it at Tk 760. They also forced us to sell the company's tea. If we accept their push-selling offer, it will affect the profit margin as the demand for tea is very low," he said.
"That's why we did not issue any fresh order," he added.
Soruz, a shopkeeper at Nasu General Store in the same area, also raised the same allegation of push-selling strategy by the distributor.
He said they received a delivery of one carton of 1-litre bottled soybean oil today (Monday). For that delivery, they were forced to take a carton of half-litre drinking water of Jibon brand.
"We took one-kilograme tea of City Group earlier. Look, this remains unsold till today," he laments.
Asked about the supply, he said the supply is getting squeezed. They have no supply of 5-littre soybean oil while the number of 1-litre bottled and poly-pack is very inadequate.
When contacted, a major distributor at Purba Rampura, M/S Bismillah Traders, said the companies skipped supplying edible oils.
"We don't have 5-littre plastic jar in our stock and we have very little volume of 1-littre and 2-littre bottles," keeper of the wholesale outlet Khokon said.
Responding to the allegation of push-marketing, he denied the allegation. When the FE correspondents showed him a copy of order where the wholesaler delivered drinking water and Halim mix in addition to edible oil, he kept mum, and left the shop ordering another shopkeeper to look after the outlet.
City Group director Biswajit Saha said they have no idea of such activities of the distributors.
"The licence of distributors would be cancelled if we find such faults," he said, adding that the refiners will sit with the government after the Eid-ul-Fitr festival to review prices of eating oil as prices surged above $2000 a tonne inclusive of freight charge
Director of TK Group Md. Shafiul Ather Taslim said they heard about the allegation of push-sale by the distributors. Under such development, they sent letter to all the distributors warning them not to get involved in such malpractice to avoid any harsh measure by the company management.
"We have enough stock of edible oil. Don't worry," he adds.
Consumers Association of Bangladesh (CAB) vice-president SM Nazer Hossain said the government failed to force the refiners to sell edible oils at the fixed rates despite cutting VATs on imports.
He suggests that the government should immediately set a comprehensive action plan to ensure smooth supply of import- dependent commodities like edible oils, sugar, wheat and others at affordable prices following gradual surge in essential prices in the globe.
The country has a demand for 2.2 to 2.4 tonnes of edible oils while it had availability of above 2.7 million tonnes of the essential in 2021, according to government data.
It imports 2.2 million tonnes of palm oil, soybean oil and mustard oil while gets another 0.4 million tonnes of soybean oil by crushing seeds locally. The country also produced above 0.1 million tonnes of mustard oil locally.
