Bottled soybean oil vanishes as import challenges persist

Bottled soybean oil has all but disappeared from retail store shelves across the capital, driven by an import shortfall and surging international prices. The ongoing shortage has left consumers frustrated and retailers struggling with limited supplies.

Industry insiders report that soybean oil and oilseed imports have dropped by 15-20% this year compared to last year, deepening the supply crisis.

Biswajit Saha, General Manager of Finance and Accounts at City Group, attributed the crisis to banks' hesitation in opening letters of credit (LCs) for soybean oil imports due to elevated global prices.
“If companies import soybean oil and sell it at current prices, they incur losses of Tk10-15 per litre,” Saha explained, emphasizing that a reduction in import duties alone would not resolve the issue as international prices remain significantly high.

A survey of kitchen markets in Mirpur 6, 11, 12, 13, and Shewrapara on Friday highlighted the widespread unavailability of bottled soybean oil. Where available, prices were Tk20-30 higher per litre than the government-set retail price.

Supermarkets like Shwapno and Prince Bazar in Mirpur 13 implemented rationing to curb hoarding, with shelves often empty within hours. At Mina Bazar in Bashundhara, only a few five-litre bottles were available, while Apon Mart maintained a comparatively better stock.

In some areas, retailers were reportedly concealing supplies, selling one-litre bottles at Tk190-200, well above the regulated price. Loose soybean oil was being sold at similarly inflated rates.

Ashikur Rahman, a shopper in Mirpur, said he visited 10 grocery stores before finally finding a five-litre bottle priced at Tk818 at Prince Bazar. He also alleged that some retailers were repackaging bottled oil into loose containers to sell at higher prices.

According to the National Board of Revenue (NBR), crude soybean and palm oil imports totaled 368,000 tonnes in October and November this year, a 20% decline from 460,000 tonnes in the same period last year. Soybean seed imports, which yield 15-18% oil, saw only a marginal increase to 220,000 tonnes.

Following the government's leadership transition in August, the number of edible oil importers has decreased. In November, 169,000 tonnes of soybean and palm oil were imported, mostly by TK Group, Meghna Group of Industries (MGI), and Smile Food Products.

To alleviate the crisis, the government reduced VAT on soybean and palm oil imports to 5% and waived VAT entirely at the production and trading levels. While this move lowered import costs by Tk10-15 per kg, its impact has yet to stabilize the market due to ongoing supply constraints.

Retailers have noted a significant decline in deliveries from oil companies, particularly for one-litre bottles. The reduced imports and limited distribution have left shelves empty and consumers increasingly worried.

Despite government interventions, the shortage continues, offering little immediate relief for either consumers or retailers.