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Bangladesh’s consumers have increased consumption of palm and mustard oil as many of them have switched from soybean oil due to its rising prices, according to a recent report by the US Department of Agriculture (USDA).
As a result of the shift, soybean oil imports and consumption are expected to decline in the current marketing year (MY) ending in June.
As such, the import and consumption of palm oil will likely rise in MY 2021-22 compared to the previous year, the Foreign Agricultural Service of the USDA said in its report on oilseeds and products on Bangladesh, released by the end of last week.
The USDA forecasts that Bangladesh’s palm oil imports will grow 4.3 per cent to 14.5 lakh tonnes in MY 2021-22 from the initial forecast of 13.9 lakh tonnes for the year. Palm oil imports stood at 12.85 lakh tonnes in MY21, according to the report.
It said overall consumption would rise 1.7 per cent to 14.6 lakh tonnes in MY22 from the previous estimate of 14.3 due to the substitution of soybean oil with palm oil imported mainly from Indonesia and Malaysia.
The US agency said soybean oil and palm oil are substitute products in Bangladesh. Most middle and high-income households prefer soybean oil while low-income consumers prefer palm oil due to its lower price.
“Palm oil also has industrial uses, particularly in the food processing industry,” it said.
The USDA said soybean oil consumption would decline 6.2 per cent to 12.1 lakh tonnes in MY22 from the previous estimate. Imports are likely to be 7 lakh tonnes in the current MY, down 6.7 per cent from the USDA’s official estimate, the report said.
“Due to the high retail price of soybean oil, consumers have increased consumption of palm oil and mustard oil,” it added.
Bangladesh mostly imports crude soybean oil from Latin America and prices of the edible oil shot up as high as Tk 840 for each five-litre container early last month.
To enable consumers to get edible oil at reduced prices, the government slashed value added tax (VAT) in the import, production and trading stages. Now only 5 per cent VAT is applicable for edible oil.
Apart from imports, the US agency also lowered its forecast on domestic production of soybean from the previous estimate. It said soybean’s planting area would be 79,000 hectares in MY22, down from the previous forecast of 82,000 hectares. Production may also be lower than the initial estimate of 1.51 lakh tonnes for the ongoing year.
Farmers planted soybean crops in January and February of this calendar year and will start harvesting in April and May.
The agency said local soybean production contributes approximately 5 per cent of the total annual soybean demand in Bangladesh. Domestically produced soybeans are used predominantly in the feed industry, the report said.
(TDS)
