01/12/2010 (Blitz) - Look into the brand of edible oil that you are consuming everyday! Whichever brand it may be, one thing is in common – everyone claims it to be edible Soya Bean oil. My readers should note that, major segment of edible oil, which is in consumption in Bangladesh, come from Malaysia. And just ask anyone in the Malaysian embassy in the locality or anyone in the government in Malaysia, if that country produces even one liter of soya bean oil. The reply will be NO! It means, the local merchants of edible oil are not supplying the consumer soya bean oil, but what they are doing is, supplying Used Palm Oil in the name of edible Soya Bean oil.

We have to understand the reason behind supplying 'Used Palm Oil' instead of 'Edible Palm Oil'. On the other hand, we also need to know, names of countries, producing Soya Bean oil. The latest international market price of edible Soya Bean oil is above US$ 1,400 per ton. Soya Bean oil comes from Spain, Brazil, Ukraine and a number of countries, while Malaysia neither grows soya seed, nor it produces soya bean oil. The current international market price of edible palm oil is above US$ 1,100 per ton, while unscrupulous importers buy used palm oil at the rate of US$ 600 plus per ton.

In Bangladesh, there is no import tax on edible oil. The importers need to pay like 22 per cent value added tax and other taxes as well as transportation cost, while importing edible oil from any country in the world. In this case, average import cost of each liter of used palm oil is not above TK. 54. On the other hand, if the importer buys edible soya bean oil from the international market, the most minimum import cost per liter will be TK. 122. So, any sensible person will easily understand that, what we are buying and consuming everyday in the name of soya bean oil is in reality, not soya bean oil at all! These are all used palm oil.

Now ask any importer, as to whether they are supplying soya bean oil, imported from Malaysia. They will firmly say, YES! Ask them, if Malaysia grows soya seed or produces soya bean oil, they will become silent. Because, they know well, what they are selling in the name of soya bean oil is not soya oil at all! But, immediately, they will claim that, Bangladesh Standard and Testing Institution [BSTI] standardized the product. Now, let me tell my readers, what BSTI standardization means.

According to BSTI procedures, the importers submit sample of the oil to them for testing and certification. But, it is so easy for even a naïve to ascertain that, the importers can always submit sample of edible soya bean oil, brought from any country like Spain, Brazil etc. But, country of origin is never written on the oil itself. So, the importers can just claim that it is edible soya bean oil from Malaysia and obtain the BSTI certification. Moreover, BSTI has no expertise to determine the difference between soya bean oil and palm oil. If Bangladesh government will collect samples of edible oil, from the local market and send it for laboratory test at Science Laboratory in Bangladesh or any labs in the world, they will easily realize one simple fact that, how the importers were in other hand, cheating the local consumers by supplying used palm oil in the name of edible soya bean oil. This is the very primary task of the government to know, what the local importers are selling in the name of edible soya bean oil.

Now, the government could very easily tackle the existing bullish increase in the price of edible oil by taking several immediate measures. Financial institutions in Bangladesh should be instructed to encourage bona fide new importers in establishing letter of credit for import of edible oil from countries like Malaysia, Indonesia etc at a lower margin. The government should also instruct Bangladesh missions in Malaysia and Indonesia to establish contacts with local oil refineries and reach into a comfortable price for edible oil to be imported by the Bangladeshi importers. The Bangladesh mission can even sign memorandum of understanding with Malaysian and Indonesian oil refineries, to ensure a better price for a months. Later, copy of the memorandum of understanding should be forwarded to the ministry of commerce, which in that case will know the exact import price of the edible oil.

It is important to mention here that, government's decision to import edible oil through Trading Corporation of Bangladesh [TCB] wont ever be successful as, bureaucracy there will always press the bidders in increasing the price, as a significant portion of the quoted amount goes as kick back to various officials in TCB as well as some 'influential' figures in the government. So, decision of importing edible oil through TCB to control the market is a void idea.

As an example, I want to mention here one more case. Bangladesh imports a few hundred thousand tons of Urea fertilizer from abroad, most of which comes from former Soviet republics. Surprisingly, Bangladesh Chemical Industries Corporation [BCIC] imports the entire volume of Urea fertilizer in the country, while BCIC is not supposed to be an importing organization of the country. Latest price of Urea in the country of origin is less than US$ 120 per ton, while, for past few years, BCIC is continuing to import Urea at prices ranging between US$ 600-970 per ton. Such huge incretion of price of Urea again was simply because the importers need to pay huge kick back to BCIC officials and even some influential people in the government. On the other hand, taking the 'win-win' situation of giving kick-backs to the influential people, they also add huge profit margin in the price. Any supplier of Urea fertilizer to BCIC makes few hundred million dollars every year. Such misuse of hard earned foreign currency of the country could easily be stopped if there was any active effort by anyone in the government in using Bangladeshi mission in the respective nations in the former Soviet republics to ascertain the exact price of Urea in the country of origin.

It was not very nice to see the Commerce Minister shouting with the importers of edible oil in front of media. Under free market policy, every businessman will try to take maximum benefit out of each opportunity. This is failure of the minister, who repeatedly pronounced commitment in keeping prices of essentials within tolerable level. And, of course, the minister flopped! If he really has sense of dignity, he should resign admitting his failure, or show to us that, from next week, we can buy edible oil at TK. 60 per liter. And of course, this is not the question of edible oil only. The minister must move his eyes to all other essentials in the market. Our honorable commerce minister is already very popular as a 'chattering box'. But, we really do not want to watch caricature of any chattering box any more. We want to see actions! We want to see results!