The Trade and Tariff Commission has recently sent letters to the commerce ministry and the National Board of Revenue (NBR) seeking higher regulatory duty on the export of rice bran oil in a bid to ensure adequate supply of edible oil in the country.
“A regulatory duty of 25% can be imposed on exports to ensure supply of refined, unrefined rice bran oil to the local market,” reads the commission’s letter, seen by The Business Standard, to the ministry.
Besides, it recommended adding the “condition of approval of the Ministry of Commerce subject to the recommendation of the Commission before exporting all types of rice bran oil”.
The commission expects the move will bring down the price of rice bran oil and make it popular as an alternative to other edible oils in the market.
According to commerce ministry data, rice bran oil is exported to India every year from Bangladesh.
Twenty rice bran oil-producing companies in the country have an annual refining and packaging capacity of 2.86 lakh tonnes. In the last fiscal year 2023-24, Bangladesh exported 64,019 tonnes of rice bran oil to India through Bhomra Land Port. In the previous fiscal year, 7289.2 tonnes of oil was exported through Benapole.
The Tariff Commission has submitted a report to the ministry titled “Imposing Rapid Control on the Export of Rice Bran Oil to Increase the Supply of Edible Oil in the Local Market”.
According to the report, the prices of soybean and palm oil have been adjusted due to an increase in edible oil prices in the international market. The price of bottled soybeans has been increased by Tk8 per litre.
Prior to the price adjustment, edible oil producers and importers stopped the supply of soybean oil to the market.
Currently, bottled soyabean oil is being sold at Tk175 per litre, loose soyabean oil at Tk168 per litre, while rice bran oil is priced at Tk195-205 per litre.
The commission says the country’s 20 edible oil producers have a total production capacity of 4.50 lakh tonnes, but this capacity is not fully utilised.
In order to curb the export of raw rice bran, the primary material for this oil, a regulatory duty of 25% was imposed during the 2019-20 fiscal year.
However, there is no duty on oil exports, which has resulted in significant quantities of rice bran oil being exported to neighbouring countries. Yet, this oil could play a role in increasing the domestic supply of edible oil.
The annual demand for edible oil in the country is 22 lakh tonnes to 23 lakh tonnes, 90% of which is met through the import and refining of soybean and palm oil.
However, through the processing of unrefined rice bran, it is possible to produce 7 lakh tonnes to 7.50 lakh tonnes of crude rice bran oil.
Refining this oil could increase the supply by 5.60 lakh tonnes to 6 lakh tonnes, which would meet 25-30% of domestic demand.
According to the commission’s observations, increasing the supply of rice bran oil to meet the additional demand for edible oil during the upcoming Ramadan could play a positive role in stabilising the overall market.
