Global palm oil prices fallen sharply, yet to BD
Staff Reporter :
Palm oil prices have fallen sharply on the global market, but Bangladeshi consumers are yet to see any relief.
Although wholesale prices in the country have dropped by more than Tk450 per maund over the past month, retail rates remain almost the same due to delays in government price adjustments. Market observers say the government’s failure to revise the official price in time has left retailers bound to an outdated rate. On 12 August, the government reduced the retail price of loose palm oil from Tk169 to Tk150 per litre, when the global booking price of crude palm oil (CPO) was between $1,026 and $1,045 per tonne-relatively stable for that period. Since then, international prices have tumbled. By November, CPO booking rates had fallen to $950-980 per tonne.
Compared to the average booking price in October, the 28 November rate was $75 lower. Between 8 October and 12 November, prices even dipped below $953 per tonne-one of the lowest levels in recent years.
This widening gap between global prices and the rate applied during the last government adjustment explains why the decline in wholesale prices has not been reflected in the retail market.
A month ago, palm oil was wholesaling at Tk6,100 per maund. In November, it dropped to Tk5,770-the lowest in recent memory. Yet the official retail price has remained unchanged at Tk150 per litre.
According to Trading Corporation of Bangladesh data, palm oil currently sells for Tk152-162 per litre in retail outlets. Despite directives, retail prices have been misaligned for months because no new revisions have been issued since August.
Industry insiders say the government’s monthly price review mechanism has essentially stopped functioning. More than three and a half months have passed without an update, leaving retailers to stick to a rate set when international prices were significantly higher.
Seasonal factors have added further pressure. With the onset of winter, palm oil solidifies easily, slowing supply order (SO) operations. Demand in colder regions, such as China, typically weakens at this time, further pushing down global prices. These seasonal trends have contributed to the fall in domestic wholesale rates.
Latest Malaysian Palm Oil Board (MPOB) data shows that CPO production increased by 11.02% in October to 2.043 million tonnes, while stockpiles rose by 16.55% to 1.473 million tonnes. The simultaneous rise in production and inventory has intensified global supply pressure, pulling booking prices down from 4,500 ringgit to around 4,000 ringgit.
Wholesalers in Khatunganj-the country’s largest edible oil market-report that domestic demand for palm oil usually declines during this season, further dragging down prices. However, because government-set retail prices remain high, consumers are not benefiting from the decreased wholesale rates.
They also note that even though SO prices have fallen, cash-based purchases have not become significantly cheaper due to winter solidification slowing down transactions.
Md Nazim Uddin, a palm oil SO trader in Khatunganj, said, “Soybean oil booking prices have been stable for months, but palm oil has dropped sharply. Booking rates recently hit their lowest point in years. Though prices have risen slightly, current import prices still allow retailers to sell competitively. The government should revise prices now and ensure adequate imports and supply before Ramadan.”
Bangladesh Wholesale Edible Oil Traders Association President Md Golam Mawla told reporters, “The edible oil price-setting process has become virtually ineffective. The Commerce Ministry was supposed to review prices monthly. When global prices fall, importers resist cuts; when prices rise, they push for increases, and the government delays decisions. As a result, whatever price the government sets, importers ultimately adjust the rates of loose palm oil, super palm oil, and soybean oil based on their import costs.”
He added that missing opportunities to cut soybean oil prices during global declines causes some losses for traders, but long delays in price adjustments and weak market oversight mean consumers rarely benefit from official price caps.