Bangladesh to Cut Import Duty on Edible Oil to 10 Percent

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

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