Soybean oil has largely disappeared from many retail shops in Dhaka and Chattogram despite adequate national stocks, exposing distortions in the edible oil market as distributors cut supplies and prices rise during Ramadan.
Retailers say bottled soybean oil has become scarce because selling above the government’s maximum retail price risks legal action, while distributors have reduced deliveries to shops.
Loose soybean and palm oil, where enforcement of the price ceiling is weaker, are already selling well above government-set rates and the industry prices announced in December.
Loose soybean oil in Chattogram rose about Tk7 per kilogram over the past week to Tk200–Tk202, while palm oil increased roughly Tk6 to Tk172–Tk175.
Wholesale prices have also climbed sharply.
At Khatunganj, the country’s largest commodity trading hub, soybean and palm oil prices have risen by Tk140–Tk150 per maund within a week.
Soybean oil is now trading near Tk7,170 per maund, while palm oil is selling around Tk6,060.
Khatunganj wholesaler Md Ifran said refiners have reduced market supply, tightening availability for wholesalers and retailers.
Chaktai–Khatunganj Aratdar General Traders Welfare Association General Secretary Md Mohiuddin said prices of several essentials, including soybean oil, palm oil, sugar and wheat, began rising late Saturday night.
He said prices jumped within hours after reports of attacks in Iran circulated in the market and have remained elevated since then.
Consumer advocates say the conflict is being used as a convenient excuse to raise prices.
Consumers Association of Bangladesh Vice President SM Nazer Hossain said traders often use external events as triggers for price increases.
He said global developments usually take time to affect the local market, and the rapid price surge suggests possible market manipulation.
He also said enforcement agencies have shown little visible action to stabilise the market.
Import data, however, does not support claims of a supply shortage.
According to Chattogram customs, Bangladesh imported 1.038 million tonnes of palm oil and 463,000 tonnes of crude soybean oil through Chattogram port during the first eight months of the fiscal year from July to February.
Despite these large imports, supply to retailers has tightened.
Official retail prices have remained unchanged since December, when the Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association set bottled soybean oil at Tk195 per litre, loose soybean oil at Tk176 and palm oil at Tk166.
Retailers say the gap between official prices and real market costs has discouraged distributors from supplying oil.
At Karwan Bazar in Dhaka, Shah Poran General Store owner Md Shah Poran said distributors have effectively rationed supply.
He said he previously received five to fifteen cartons of edible oil daily but now gets no more than two cartons of soybean oil.
He also said distributors forced him to buy 25 packets of packaged lentils with every two cartons of 20-litre oil.
“Keeping the official price unchanged brings no benefit when oil is simply not available,” he said.
“The retail market now has a petrol-like shortage of edible oil.”
Retailers across Dhaka describe a similar pattern.
Moghbazar shopkeeper Tapan said distributors supplied only five to seven litres of soybean oil to his shop at the start of last week and stopped deliveries entirely over the past few days.
When he contacted distributors of three brands on Thursday and Friday, they said there was no supply and asked him to wait for new consignments.
He said he stopped selling edible oil from Friday after buying loose oil above the government rate and selling it for two days.
Retailers say the shortage is spreading across neighbourhood shops and several superstores in the capital.
Commerce Minister Khandakar Abdul Muktadir told reporters after a meeting with edible oil refiners on Monday that panic buying by consumers has temporarily disrupted the balance between demand and supply.
He said the country has sufficient edible oil stocks and imports are continuing normally.
Officials also said global edible oil supply routes are not directly dependent on the Strait of Hormuz, unlike fuel or liquefied natural gas shipments.
Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association President Muhammad Mustafa Haider said the country is not facing a real supply shortage.
He said panic buying and hoarding at different stages of the supply chain have worsened the situation.
Haider said the deeper problem is that the pricing mechanism has not been updated despite rising costs.
“The maximum retail price should already have been raised by at least Tk10 per litre,” he told TIMES of Bangladesh on Friday.
US soybean prices rose from below $1,050 in early January to about $1,212 on Friday, according to investing dotcom.
Global CDSO (crude degummed soybean oil) prices surged to around $1,270, while the government still acknowledges the previous rate of $1,120 per metric ton, said Haider.
Shipping costs have increased by at least one-third and domestic transport costs have also risen.
Despite these increases, the government-set retail price has remained unchanged for eight months, although the pricing formula is supposed to be revised twice each month.
Haider said the formula calculating retail prices based on import consignment costs, refining expenses and the previous month’s letter of credit prices is not being followed.
He also said the government’s estimate of refining costs is based on data from about a decade ago and no longer reflects actual expenses.
“When prices are artificially kept below market costs, expectations of a future increase encourage hoarding,” he said.
He said he has no evidence that refining companies themselves are hoarding oil but acknowledged that fuel shortages have disrupted distribution in some areas.
The result is a market where large import volumes coexist with empty retail shelves as price controls, supply cuts and weak enforcement distort the edible oil trade.
