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The Bangladesh Trade and Tariff Commission (BTTC) has proposed imposing a duty to control the export of rice bran oil or rice husk oil to ensure an adequate supply of edible oil in the country's market. For this, the organization has recommended imposing a 25 percent regulatory duty (RD) on the export of both crude and refined rice husk oil.
The Tariff Commission made this proposal in a letter to the Ministry of Commerce and the National Board of Revenue (NBR) last Wednesday (December 11, 2024). In addition, it has been recommended to impose a condition of prior approval of the Ministry of Commerce on the export of rice husk, crude, and refined rice husk oil.
It is learned that currently there is a 25 percent duty on the export of rice husk. Now, the BTTC has proposed to impose a regulatory duty at the same rate on the export of crude and refined rice husk oil. The agency said that this duty is necessary to ensure the supply of refined rice bran oil at a reasonable price in the local market. Taking quick action in this regard ahead of the upcoming Ramadan will increase the supply of edible oil in the local market overall. The commission believes that there will also be relief in terms of prices.
In a letter to the Ministry of Commerce and NBR, the Tariff Commission said that the annual demand for edible oil in the country is about 2.2 to 2.3 million tons. Against this demand, about 90 percent of the demand is met by importing crude soybean and palm oil and refining it locally. On the other hand, it is possible to obtain 7 to 7.5 million tons of crude and 5 to 6 million tons of refined rice bran oil annually from the bran produced in the country. This amount of bran oil will meet 25 to 30 percent of the total local demand for edible oil.
The Tariff Commission said that in such a situation, there is a need to increase the supply of locally produced rice bran oil with the prices of edible oils currently rising in the international market. According to the Trading Corporation of Bangladesh (TCB), the current price of 1 liter of bottled rice bran oil in the country is 195-205 taka, and the price of bottled soybean oil is 172-175 taka. In addition, the price of open palm oil per liter is 160-161 taka.
Rice bran is basically the oily layer between the rice husk and white rice, which is also known as bran. This bran is processed to obtain rice bran oil, which is known as a popular and healthy cooking oil in the world. The Tariff Commission said that the country produces 55 million tons of rice annually. About 6-7 lakh tons of rice bran oil can be produced from this rice.
According to the Bangladesh Rice Bran Oil Mills Association, there are a total of 20 rice bran oil mills in the country. The annual production capacity of these mills is 453,000 tons.
The Tariff Commission said that rice bran or kura, the raw material for kura oil, was once exported from Bangladesh. Due to this, local mills faced a shortage of raw materials. Due to this, a 25 percent duty was imposed on kura exports from the 2019-2020 fiscal year. Although kura exports were discouraged, crude kura oil is being exported. In the last fiscal year 2022-23, 7,289 tons of crude kura oil were exported through Benapole port and 64,19 tons of crude kura oil were exported through Bhomra and Hili land ports in the 2023-24 fiscal year.
Meanwhile, kura oil is supplied to low-income people at subsidized prices through TCB. However since there is more profit from exporting crude kura oil, local mills are more interested in exporting than supplying oil to TCB. As a result, TCB is not getting the kura oil it needs. For this reason, TCB has also written to the Ministry of Commerce requesting it to take necessary measures to discourage the export of crude rapeseed oil.
On the other hand, the Bangladesh Feed Industries Association has also made a similar request. The association said that if the export of crude rapeseed oil is banned, the ingredients used in the production of poultry and fish feed will be easily available. After reviewing both recommendations and taking into account the current edible oil market situation, the Tariff Commission has recommended imposing a 25 percent restrictive duty on the export of rapeseed oil.
Source: Online/OFA
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