DHAKA, Feb 15 (Reuters) – Bangladesh
will cut its import duty on edible oils in a bid to
stabilise domestic prices amid soaring global food costs, a commerce ministry
official said on Tuesday.
“The government has decided to
reduce import duty on edible oil to 10 percent from 15 percent
earlier,” the official said, adding that the measure would take effect
soon, but without giving details.
In 2010, Bangladesh imported
1.38 million tonnes of edible oil, of which 1.015 million tonnes was
palm oil, according to Oil World.
The country buys palm oil
from Indonesia and Malaysia and soybean oil from Brazil and Argentina. On
Feb. 10, palm oil prices touched 3,967 ringgit a tonne, a peak not seen
since March 2008 on concerns that seasonally heavy rains have stalled
harvesting in top producers Indonesia and Malaysia.
Analysts said demand for edible
oils this year is likely to fall with spiralling prices in the
impoverished delta nation of 150 million people.
“Our market is very price
sensitive. In the past we had seen that demand for edible oil dropped by
10 percent due to lower consumption as prices reached beyond buying
capacity,” said A.K.M. Fakhrul Alam, Malaysian Palm Oil Council’s
regional manager for Bangladesh, Nepal and Myanmar.
“The duty cut would have
little impact in the domestic markets considering the high international
costs,” he told Reuters.
Separately, the central bank has
asked all banks to charge a maximum interest rate of 12 percent on
loans used to import essential commodities such as edible oil,
sugar, pulses, onion and fruits.
The rate of 12 percent on
imports of essentials had been fixed in May 2010, but some banks still charged
more than 12 percent, the central bank said in a statement.
Food inflation in Bangladesh
hit 11 percent in December.
Source: Reuters reporting by Ruma
Paul; editing by Anis Ahmed