02/01/2008 (The Daily Star, Bangladesh) - Consumers in lower and middle income brackets have been hit hard by the skyrocketing prices of oil and rice over the last week with traders fearing further jumps due to price hikes on the global market.

The minimum price for coarse rice was Tk 32 a kg yesterday, up from Tk 25 a week ago. Prices of medium-quality rice varieties, consumed mostly by the middle class, ranged between Tk 38 and 45, compared to Tk 32-38 last week.

The retail price of a litre of soya bean oil (non-brand) was Tk 94-100 while it was Tk 87-90 seven days ago, shoppers said.

The price of a five-litre soya bean oil can rose by at least Tk 50 both on retail and wholesale markets in the last seven days. A five-litre container of Rupchanda soya bean oil sold at Tk 500 on retail market yesterday compared to Tk 450 a week ago. Prices of the same quantity of Pushti and Teer soya bean oil rose to Tk 490 from Tk 440.

Worried over the prices spiralling out of his reach, Abdul Wahab, a rickshaw puller, said, "I do not know how to make ends meet. We are already skipping a meal every day."

Our correspondents from different districts reported that soya bean oil was selling at Tk 100 a litre yesterday. It has lately been in short supply on the retail markets there.

On the wholesale markets, per litre soya bean oil sold at Tk 93 while it cost Tk 85-86 a week ago. Price of palm oil rose to Tk 80 from Tk 73 and that of a better quality (super palm) to Tk 84 from Tk 77. The latter is being widely sold as soya bean oil by retailers.

Importers claimed their prices reflect the hikes on the international market. But wholesalers and retailers dismiss the argument saying that no consignment of soya bean or palm oil has entered the country since the recent global price spiral.

They pointed out that there are always reserves of edible oil that can meet the domestic need for at least a month. So, usually it takes more than a month for the global price hikes to affect the local markets.

In the last few days, the price of per tonne crude soya bean oil on the international market has risen to $1,160 from $1,100 on December 22. During the same period, the crude palm oil price has shot up to $1,060, marking a $65 rise, importers said.

But AKM Fakhrul Alam, country manager of Malaysian Palm Oil, said, “The global price hikes have nothing to do with the soaring up of price on the local market as the edible oil now being sold was exported long before December 22.”

Oil prices should not rise further in the next couple of weeks as a shipment of 32 thousand tonnes of crude soya bean is scheduled to arrive at Chittagong port in a day or two. Another 25 thousand tonnes of crude palm oil would reach by the second week of this month. Both the consignments have been bought at previous international rates, he added.

Sensing that the retail price might see a sharp rise, unscrupulous traders have been hoarding soya bean oil, said wholesalers at Moulvibazar in Old Dhaka, the largest wholesale market for edible oil.

A section of traders are using brokers to collect oil from local market with the motive of selling those at much higher prices.

“Importers and distributors are selling oil at high rates instead of supplying us with it as per our demand. And it all forces us to increase prices,” said Kamal Hossain, a wholesaler at the capital's Karwan Bazar.

He also said the government should intervene in the market situation to make sure prices of the products bought at previous international rates do not increase.