Originally posted in বণিকবার্তা on 7 April 2026
Former edible oil giants recede as supply crisis looms
The current edible oil price in the international market has made the situation difficult for traders to continue importing unless there is a rapid price adjustment. Alongside this, raw material costs for bottling have nearly doubled, further inflating production expenses.
Amassive realignment has happened in Bangladesh’s edible oil market. Several leading corporate giants, including City Group — the distributor of the popular ‘Teer’ brand — have significantly limited their import, refining, and marketing operations. Corporate heavyweights, such as Bashundhara and S Alam, have virtually exited the scene. The market now relies almost entirely on three conglomerates: TK Group, Meghna Group of Industries (MGI), and Abul Khair Group. In particular, TK Group is controlling the soybean oil imports and refining exclusively. Meanwhile, a sharp decline in the opening of Letters of Credit (LCs) has sparked fears of a severe supply crunch ahead of the upcoming Eid-ul-Adha festival.
The Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association has issued a formal warning to the commerce ministry. In the letter, the trade body stated that maintaining a steady supply is impossible unless the government adjusts prices in line with global market shifts. The last price revision occurred on December 8, 2025, when the international base price stood at $1,100 per tonne. Since then, global rates have surged by approximately $300 per tonne. Despite repeated alerts regarding this global price hike, the ministry has yet to take effective action on price adjustment. Importers claim they have continued to supply the market by importing oil at high rates to honour government requests, resulting in substantial financial losses.
The letter further states that the current edible oil price in the international market has made the situation difficult for traders to continue importing unless there is a rapid price adjustment. Alongside this, raw material costs for bottling have nearly doubled, further inflating production expenses.
Data from the National Board of Revenue (NBR) underscores this market shift. During the first quarter of 2026 (January–March), Bangladesh imported nearly 700,000 tonnes of soybean and palm oil, with a total customs valuation of BDT 96.05 billion. These imports include 260,000 tonnes of crude soybean oil, valued at BDT 37.70 billion, and 445,000 tonnes of refined palm oil, which amounts to BDT 58.35 billion.
NBR records show TK Group is now the primary driver of soybean oil imports, bringing in 104,000 tonnes during the first three months of the year to maintain market flow. Other key importers during this period include: Bangladesh Edible Oil Limited (BEOL), which imports 56,179 tonnes; Sena Edible Oil Industries, 36,250 tonnes; City Group, 23,745 tonnes; Abul Khair Group, 22,516 tonnes; Meghna Group of Industries (MGI), 11,500 tonnes; and City Group, previously spearheaded the sector, 23,745 tonnes.
Three industrial groups are currently neck-and-neck in palm oil imports. During the first quarter of 2026, Smile Food Products Ltd (a subsidiary of the Abul Khair Group) imported 137,600 tonnes. Meghna Group of Industries (MGI) followed closely with 132,900 tonnes, while TK Group secured the third spot with 118,500 tonnes. In contrast, City Group managed only 6,500 tonnes of palm oil imports.
Meanwhile, some industrial groups are importing raw soybean seeds from Brazil and the United States and producing edible oil within the country. In the first three months of this year, MGI and Delta Agro Industries produced approximately 75,000 tonnes of soybean oil through local crushing operations.
Speaking to Bonik Barta, MGI Chairman Mostafa Kamal said, “The amount of soybean oil we’ve imported in the first few months of the year would have been several times higher under normal market conditions. The international price of crude soybean oil has surged from $1,200 to $1,400 per tonne, including freight and premiums. Palm oil has similarly hit $1,250. But selling at government-mandated prices forces importers to stomach an average loss of BDT 30 per kilogram. In this context, the supply chain has been shrunken.
He added that MGI is now prioritising the import of soybean seeds over crude oil to maintain production and a steady supply.
Industry experts stated, “While the government is expected to hold regular consultations with importers and refiners of edible oil, these meetings haven’t reportedly been held. Due to the distance between the government and businessmen, the LC opening rate has actually dropped ahead of Eid-ul-Adha, instead of increasing. It typically takes three months for soybean oil shipments from Argentina and Brazil to reach Bangladeshi ports. Besides, the government has no plan to provide subsidies by procuring soybean oil. Therefore, the market has effectively narrowed to one major trader for soybean oil and three for palm oil, creating immense pressure on the national distribution network.
TK Group Director Mohammad Mustafa Haider told Bonik Barta, “Even advance purchases are now costing over $1,200 per tonne in the international market. Along with this, there’s a freight-premium. But the lack of price adjustments is causing massive losses for importers. As there has been no government-business meeting for several months, a lack of policy coordination has been created.”
Noting that despite a high demand around Eid-ul-Adha, businessmen are uncertain in terms of opening LC, he said, “Due to the large gap between the purchase price in the international market and the selling price in the domestic market, there is a risk in increasing imports. As a result, the overall import condition may have been negative in the current month. To keep the market competitive and functional, the government must either move toward a fully open market or commit to reality-based price adjustments through consistent dialogue with traders. Without these measures, the supply chain will likely contract further, pushing the entire sector toward further pressure.”
Global edible oil prices jumped by 5.1 percent in March, marking the third consecutive month of increases, according to the Food and Agriculture Organisation (FAO) of the United Nations. Particularly, palm oil prices have now reached the highest level since mid-2022. As a result of a price hike in fuel oil, the demand for edible oil has increased as a source for biofuels. Furthermore, a reduction in palm oil production has created the situation.
Delta Agro Food Industries, which launched in Narayanganj in 2022, has invested BDT 12 billion. The facility boasts a daily refining capacity of 1,000 tonnes and can crush 2,500 tonnes of soybean seeds daily. Amirul Haque, the firm’s managing director, told Bonik Barta, “The company imports approximately 60,000 tonnes of soybean seeds from the United States every month. Each shipment yields roughly 12,000 tonnes of soybean oil. The government should fix prices based on import invoices to manage current market instability.”
Smile Food Products, a subsidiary of the Abul Khair Group, has recently joined as a major investor. With the leadership of Group Chairman Abul Kashem, the company markets soybean oil under the “Jahaj Marka” (Ship Brand). Since mid-2023, the company has maintained an active presence in the soybean and palm oil market. The company currently rents idle refineries to process its imported crude oil for local distribution.
In this regard, Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue (CPD), told Bonik Barta, “The government must first estimate the actual volume of current reserves. Authorities must investigate whether supply chain bottlenecks are appearing despite adequate inventory levels. The situation can be different due to the impact of rising global prices. The government should assess the current stocks and how long it’s possible to meet the demand, as well as review the current price structure, whether it is reasonable in the context of potential high demand. A rational and participatory dialogue between the state and private traders is essential to fix the price, just as in the previous precedent.
