Palm oil prices in domestic wholesale and retail markets began to fall after Indonesia announced it would resume exports of the product.
Palm oil imports had become uncertain after Indonesia, one of the world’s main suppliers of the product, banned exports on April 28.
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Yesterday however, bulk palm oil was being sold at 165-176 takas per litre, down 3.67% from 172-182 takas per liter a week ago, according to data from the Trading Corporation of Bangladesh.
Similarly, super palm oil is now being sold at Tk 178-180 per litre, down 3.24% from Tk 180-190 per liter a week ago, according to the data.
Uncertainty in the palm oil market began to ease after Indonesia announced the reopening of exports of the product. As such, local prices started to fall at the same time, said Abdur Razzak, a wholesale trader in Khatunganj in Chattogram, the country’s biggest wholesale hub.
The product is now sold in local markets at prices even lower than the rates set by the government.
Palm oil was being sold at Tk6,390-6,450 per maund (37 kilograms) in Khatunganj yesterday, Razzak said.
But given how the current prices are lower than government tariffs, the authorities would have to adjust the prices or it will have no effect on the level of retail or consumption, he added.
Abul Hashem, general secretary of the Bangladesh Edible Oil Wholesalers Association, said if factory owners maintained the current supply of palm oil, prices would fall further.
“But if there is a supply crisis for whatever reason, the price will rise again,” he said, adding that the government will also have to monitor whether the import and supply chains are in good shape. order.
Tariq Ahmed, director of operations and marketing at TK Group, said that palm oil shipments have not yet started, as Indonesian customs officers have not yet given any notification to do so.
“As a result, many ships are waiting in their port,” he added.
Ahmed went on to say that the shipment of vegetable oil will start right after a notification is issued in this regard. However, there are fears of port congestion due to the long queue of ships awaiting delivery from Indonesia, Ahmed said.
Palm oil shipments are expected to start arriving in Bangladesh in June, he added.
Indonesia has allowed palm oil exports to resume from Monday after a three-week ban, but industry players have said shipments are unlikely to resume until details are clear. will not emerge on the amount of edible oil that should be withheld for household use, Reuters said.
Indonesia, the source of 60% of the world’s palm oil, halted exports of crude palm oil and some derivative products on April 28 in a bid to drive down local cooking oil prices. The ban has rattled global markets for edible oils at a time of supply shortages resulting from the war in Ukraine.
Indonesia’s Ministry of Commerce yesterday issued rules stating that companies must obtain an export permit which would only be granted to those who are able to meet a so-called Domestic Market Obligation (DMO).
The settlement did not disclose details of what this DMO would entail, but said the permits would be valid for six months and that companies must report the completion of their shipments monthly.
President Joko Widodo announced last week that the ban would be lifted and said he was confident that bulk cooking oil was generally heading towards the target price of 14,000 rupees ($0.95) per litre.
By the end of April, traders had opened Letters of Credit (LC) to import around 90,000 tons of palm oil from Indonesia. After the country imposed a ban on palm oil exports, there was uncertainty about the import of this product.
According to the Bangladesh Bank, around 90,000 tonnes of oil import debentures were opened in the four days before the export ban was imposed.
The ban came into effect before the oil could be shipped and as a result these imports remained blocked.
In the first 10 months of the current fiscal year, 90% of Bangladesh’s palm oil imports came from Indonesia.
After the country stopped exporting, traders waited for the ban to be lifted instead of importing from other sources.