The interim government has reduced taxes and duties on soybean and palm oil to lower prices amid high inflation but this has not helped raise imports. Instead, there is a shortage of bottled edible oil in the markets.

Oil importers and refiners said they have reduced imports apprehending losses as market prices were below what they would have to pay for purchases from abroad.

That is why though the duty cut translates to a reduction of Tk 10 to Tk 11 per kilogramme (kg), no benefit has come about for end customers, they said.

The government reduced VAT on imports of soybean and palm oil twice to 5 percent from 15 percent since October 17 this year. It also fully exempted VAT at the production and trading stages of the highly import-based commodity. As a result of the reduction, import cost of edible oil fell from around Tk 18 to Tk 7 per kg, according to stakeholders.

The reduction has prevented local market prices from fluctuating, importers and refiners said.

Meanwhile, retailers said the refiners were not supplying bottled oil to the market as per demand.

The importers and refiners said they recently requested the interim government to adjust the price of soybean oil in tune with that in international markets, but no decision has been taken so far.

Amid such a situation, the Bangladesh Trade and Tariff Commission has decided to review the production cost of edible oil. The government agency held a meeting with edible oil processing companies yesterday.

Meanwhile, inflation rose 11.38 percent in November, the highest in four months, according to the Bangladesh Bureau of Statistics.

Mohammad Bablu, a retailer in Karwan Bazar, one of the biggest kitchen markets in Dhaka, said he has a daily demand for two cartons (120 litres) of bottled soybean oil.

However, he is getting one carton (60 litres) from the dealer every other day.

Dealers say there is a supply crisis and this situation has been prevailing for the last 20 days, he said.

Another retailer, Hazi Mohammad Mizan, said only 10 percent of his demand for bottled soybean oil was being met for nearly a month.

Dealers were not providing any oil of Rupchanda and another prominent brand of oil, he added.

Abu Bakar Siddique, a wholesaler in Karwan Bazar, said he has a daily demand for 5,000 litres of soybean oil but was getting 1,000 litres.

And for the last couple of days, he has not gotten any five-litre bottle from dealers.

A visit to various retail markets in Chattogram yesterday revealed that there had been no supply of bottled soybean oil of Rupchanda, Fresh and another prominent brands for about a month.

Meanwhile, the price of bottled soybean oil has been more or less stable over the past week, as per data of the state-run Trading Corporation of Bangladesh.

The price of bottled soybean oil fell by 1 percent and the price of palm oil has increased slightly.

In the last one month, the price of loose soybean oil has increased by 2.46 percent while loose palm oil by 2.59 percent.

Meanwhile, data from the National Board of Revenue confirmed that edible oil imports had decreased.

In October and November, 368,000 tonnes of crude soybean and palm oil had been imported.

During this same period last year, 460,000 tonnes had been imported, meaning imports had decreased by about 20 percent year-on-year.

Taslim Shahriar, senior assistant general manager at the Meghna Group of Industries, one of the biggest local commodity importers and processors which marketed the Fresh brand of oil, said international prices were increasing for the past few months.

For this, consumers are not getting any benefit from the tax and duty reductions, he said.

He said they have reduced imports fearing that global market rates would be higher than local prices, which would lead to losses.

Claiming to have brought no change to their market supplies, he also urged the government to adjust local prices.

He said they bought soybean oil at $1,150 per tonne in August, which increased to $1,217 in October.

Two months ago, the price of palm oil was below $1,000 per tonne and it has now increased to over $1,300, he said.

Mohammad Dabirul Islam Didar, general manager of finance and accounts at Bangladesh Edible Oil Limited, which markets the Rupchanda brand of oil, claimed that they were supplying products to the market according to their capacity.

However, the supply goes up and down due to various reasons, he said. Normally, they supply 8,500-10,500 tonnes of edible oil per month.

"I heard that loose soybean oil costs more than bottled. This is not supposed to happen," he added.

Biswajit Saha, director of corporate and regulatory affairs at City Group, which markets the Teer brand of oil, said currently selling bottled edible oil was leading to losses.

"So, naturally we had to cut supplies to the local market," he said.

No one would buy a product at a high price to sell it at a loss. The price in the international market is quite high and the price was not being adjusted locally, he added.