After the overthrow of the Sheikh Hasina government in Bangladesh last year in August, the country has been facing market instability and high inflation. As per reports, grocery stores across the country are facing a shortage of cooking oil including branded bottled oil and non-branded loose soybean oil. The shortage has resulted in hiked prices further adding to the problem.
The interim government that took over after the ouster of the Awami League government reportedly waived the Value Added Tax (VAT) to stabilise the prices of cooking oil after prices were hiked to facilitate supply chains. The VAT on cooking oil was reduced by 5 per cent and the VAT at the production and business levels was fully removed in October last year. According to retailers and wholesalers in major cities including Dhaka, Chattogram and Barishal, the supply chain was impacted after the government refused to raise prices last month. The local refiners were seeking a hike in prices citing increased import costs.
According to reports, strategic pricing tactics adopted by producers and marketers ahead of Ramadan have increased soybean oil prices. Reduced commissions and stringent credit policies by dealers at the retail level have led to a considerable decline in bottled oil availability in local shops of Bangladesh, which relies on imports to meet its annual oil requirement of 24 lakh tonnes.
Bottled soybean oil is selling at Tk 175 to 176 per litre in the country marking a one per cent increase over the last month. As per data compiled by the Trading Corporation of Bangladesh (TCB), the prices of loose soybean oil increased by 4 per cent in the last week going from Tk 180 to Tk 182 per litre.
Bangladesh facing financial crisis
Bangladesh has been facing financial troubles following the overthrow of its elected government last year by a violent revolution. The country is engulfed by political and financial instability. In a recent financial setback, Switzerland and the US discontinued their financial aid to Bangladesh.
Soon after assuming office last month, US President Donald Trump stopped all the US funding coming into Bangladesh. Trump passed an executive order directing the USAID to suspend all its operations in Bangladesh. This was followed by Switzerland’s decision to discontinue its financial aid to Bangladesh. The Swiss Agency for Development and Cooperation (SDC) decided to end its bilateral development programmes with three countries including Bangladesh by the end of 2028.
