The edible oil market in Bangladesh is in chaos, reflected by soaring prices, supply shortages, and regulatory actions that have created fear in every corner of Bangladesh. Since the sacred month of Ramzan is knocking on the door, the market turbulence has amplified, and uncertainty surrounds questions over whether the crisis is natural or artificially instigated.
Government Action: Imposing 25% Regulatory Duty on Rice Bran Oil Exports
To stabilize the domestic supply and address the crisis, the Bangladeshi government has enforced a 25% regulatory duty on rice bran oil exports. The decision was made under the Customs Act, 2023, and is effective immediately after consultation with the National Board of Revenue (NBR), as stated in a gazette notification released on Sunday. While this move aims to ensure adequate supplies of oil, analysts argue that it will not really impact the overall situation as this is dominated by the prices and offerings of soybean and palm oil.
On the other hand, the wholesale price of edible oils rose sharply in Dhaka and in other metropolitan cities. In local markets, unpackaged soybean oil sells at Tk 170-175 per liter while the packaged options sell at Tk 175-178. The five-liter container of soybean oil now sells at Tk 850. Palm oil has also increased, and it now sells at Tk 170-175 per liter. Retailers blamed the hikes on decreased supplies from distributors, saying that most refiners were withholding packaged oil from their supply chain to avoid losses caused by stagnant local prices. Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association has approached the Trade and Tariff Commission for revision of prices citing high import costs.
Global edible oil prices have gone up by almost 25 per cent as a result of adverse weather and geo-political wars causing disruptions in the supply chain. Traders are thus not able to build up stocks while consumers have had to shell out more.
Artificial Crisis
Despite all complaints from consumers, officials and oil refinery owners maintain that there is no shortage of edible oil in the country at all. According to the Bangladesh Trade and Tariff Commission (BTTC), the country has sufficient stock, and the apparent crisis is more or less fabricated. According to the statistics of the Customs, edible oil imports increased by 35% from December 2024 to January 2025, with letters of credit for oil increasing at the same percentage. However, stories from the grassroot level tell a different tale. The refinery owners admitted that oil is not present unless bought along with other commodities which, in itself created an illusion of shortages.
Consumers and market observers claim that middlemen are stockpiling the oil or packaging it as loose oil at inflated rates. Authorities have warned such acts will attract legal action against them. Also, smuggling and over-the-border undocumented trade along Bangladesh’s borders aggravate the situation since other neighboring countries charge much more. Authorities have asked border administrations to detect and stop those acts.
Increasing Supply Amid Bottlenecks
Refiners point out that the supply has markedly increased in recent months. To illustrate, for instance, City Group, which is one of the leading food grain importers in Bangladesh, supplied 50,700 tonnes of edible oil in January 2025 from 14,262 tonnes of bottled oil during the same time last year. Similarly, Meghna Group supplied 47,668 tonnes, which comprises 15,000 tonnes of bottled oil compared to 25,000 tonnes in the earlier month. Despite these developments, consumers remain unable to get oil at relatively affordable prices. Many attribute this to supply shortages at the level of distributors. Hoarding and selling bottled oil in loose oil form for greater profits are among the accusations.
A Complex Situation for the Government
Consumer advocacy groups say stronger intervention measures are needed although the government has been able to undertake several initiatives such as stepped-up market regulation and warnings issued to traders to curb price manipulations in stabilizing the edible oil market.
Edible oil crisis is not new for Bangladesh, but this year is similar to 2022 when supply chain disruptions caused by the global world, Russia-Ukraine war, and manipulation by local traders have affected the market. Bangladesh is one of the biggest importers of soybean and palm oil, making it vulnerable to international price fluctuations. When these prices surge sharply, domestic prices shoot up quickly, and short-term shortages have been commonplace. Panic buying added to the current situation, with accusations of hoarding by firms seeking to profit from the shortage.
The government responded by enforcing price limits and enhancing market supervision, but difficulties in enforcement remain. This edible oil crisis remains a tricky problem without any easier solution. While the government officials and refiners argue that there really isn’t an actual shortage, the market conditions point otherwise. This crisis has led to increasing public annoyance about rising prices and conditional sales as well as the suspected cases of hoarding.
