Weak Taka, increased tariffs prevents Bangladesh from lowering prices further

27/06/2022 (Dhaka Tribune) - Although global prices of crude soybean and palm oils have gone down, Bangladeshi consumers are unlikely to get the maximum benefit as the Taka continued to weaken against the US dollar, along with the announcement of higher tariffs on imported cooking oil after this month.

The National Board of Revenue (NBR) now imposes only 5% duty on imported crude soybean oil.

But it is likely to go up to 15% after June 30, effective from the new fiscal year 2022-23, starting from July 1.

However, insiders are hopeful that the government may retain the previous import duty on imported soybean and palm oils.

The proposed national budget will be passed at the Jatiya Sangsad on June 30.

On Sunday, banks were selling US dollars for import payments at Tk98 to 99 which is the highest exchange rate of dollars ever in the banking channel.

Although the Bangladesh Bank (BB) is selling US dollars at Tk92.95 to the scheduled banks, the banks are selling dollars higher at Tk3-4.

Two months ago, the US dollar was hovering around Tk95-97 as against Tk89-90 in the kerb market.

The weak local currency against the US dollar makes imported goods costlier.

Dollars are being sold by money exchange houses at Tk98-99 in the kerb market while it is being bought at a rate of Tk96-96.50.

It may take some time for the market to stabilize after the recent turmoil, said businessmen of multiple money exchanges at Gulshan and Motijheel.

On the other hand, banks in the country are officially selling dollars at Tk92 for opening import letters of credit (LCs).

However, the unofficial price of the dollar is Tk93-94, informed officials of the treasury department of several banks.

The head of the treasury department of a private bank said that they have to buy dollars from money exchanges at a range of Tk92.50-93.

Oil prices

The price of crude soybean oil per tonne was $1,424.19 per tonne on June 24, as against $1,969.62 one month back, showing a 27.69% drop.

The price of one tonne soybean oil was $1,727.08, 17.54% less than the previous year.

Argentina is the main source of soybean oil in the case of Bangladesh.

Meanwhile, the government on Sunday reduced the price of soybean oil by Tk6 per litre from Tk205 to Tk199.

Talking to the media, senior secretary of the Ministry of Commerce Tapan Kanti Ghosh said that the decision to reduce the price of edible oil in the local market was taken in line with the reduction of price in the international market.

Meanwhile, a press release of the Bangladesh Vegetable Oil Refiners & Vanaspati Manufacturers Association said that the price of per litre loose soybean oil will be Tk180, per litre bottled soybean oil will be Tk199 while a jar of five-litre bottled soybean oil will be Tk980.

Meanwhile, the price of one tonne palm oil was $1,270 on June 24, as against $1,690 one month back, a 24.85% drop.

The price of one tonne palm oil was $1,091.99 one year back, marking the current price as a 16.41% increase.

Indonesia is the main source of palm oil as a commodity.

Lentil price was $533.23 on June 24, 2022 against $703.32 and $514.05 per tonne a year back.                    

The price of rice also dropped in the international market.

The price of a tonne of rice in the international market was $436 on June 24, against $467 showing 6.64% and $484, showing a 9.92% one year back.

Soybean oil prices increased five times from October 2021 to June 2022 in the local market.

Price of wheat was $428.43 per tonne on June 24, against $506.33 per tonne a month ago, marking a 15.38% drop.

However, the price of wheat is 43.24% higher compared to the price of the commodity one year back.

It was $299.09 a year back.

However, the price of refined sugar is showing an upward trend, as it was $538.95 on June 24 against $514.90 a month back, and $460.90 a year back.

Brazil is the main source of crude sugar in the case of Bangladesh.

Onion prices, meanwhile, have also shot up in the international market.

Price of the imported variety was $147.27 per tonne on June 24, against $124.82 a month ago, a 17.98% rise, and $273.63 per tonne a year back.

https://www.dhakatribune.com/business/2022/06/22/soybean-oil-prices-drop-20-in-the-global-market