Bangladesh: One of the biggest markets of edible oil

by Business Correspondent
August 1, 2011

http://www.weeklyblitz.net/1614/bangladesh-one-of-the-biggest-markets-of-edible

With the annual import of above one million tons of refined edible oil alongside similar volume of crude oil, Bangladesh has turned into one of the biggest markets of edible oil. For past few years, Malaysia and Indonesia have been exporting refined edible oil to Bangladesh almost on a monopoly basis, as producers from other countries failed to compete with the price offered by Malaysian and Indonesia. According to information availed from Chittagong Port in Bangladesh, import price of refined soya bean oil from Malaysia and Indonesia ranges between US$ 1400-1500 per ton while price of Palm Oil is between US$ 1100-1200 per ton. Bangladeshi importers do not import refined edible oil in flexi tanks. Most of the importers import the oil in steel drums while a few import in PET bottles.

Traditionally Bangladeshi consumers are used to consume virgin rape/mustard oil. Before '60s, oil industries in Bangladesh meant only oil seed crushing units. Later on, edible oil refining units started to setup in this country gradually but till late '80s, the growth was very slow. After that, demand for refined edible oils, started to increase in pace with economic growth and development. To cope up with the situation, new refineries started to set up and simultaneously palm oil refining technology was also introduced in this country owing to its growing demand. Since mid '90s, when the palm oil gradually became popular, more and more palm oil refining units were set up in Bangladesh, which is still continuing.

Currently there are 86 registered edible oil refineries most of which are small in capacity i.e. 30 ton per day to 60 tons per day, with the total annual refining capacity of over 3.5 million tonnes. The newly installed edible oil refineries are much larger equipped with dry fractionation plants and plc controlled, with production capacities varying from 300 to 1000 tons per day. The active refining units, which are 18 in number, produce about one million tonnes of refined edible oils annually of which about 65-70% is refined Palm Olein and Super Palm Olein and the rest refined soya bean oil. There are 14 shortening plants in Bangladesh with annual refining capacity of about 150,000 tonnes.

Soybeans as a crop were introduced into Bangladesh during the 1960s and, beginning in the early 1980s, cultivation was promoted by the Mennonite Central Committee [MCC], an international voluntary organization working in Bangladesh. Largely as a result of MCC efforts, cultivation expanded somewhat, especially in the Noakhali area. Today, approximately 90,000 acres is under soybean cultivation [production approximate 100,000 ton a year]. This figure is growing because of the demand for locally-grown soybeans in the animal feed industry. For a variety of reasons, it is thought that Bangladesh could become a major producer or a producer able to meet its own growing requirements for soybeans and soybean products.

These domestically grown soybeans [approximately 100,000 MT produced per year] have in past years been used mostly as a feed ingredient for poultry and livestock. However, farmers faced difficulties in using full fat soybeans, e.g., an excess accumulation of fat in layers, and feed manufacturers are now using imported de-oiled soybean meal. Inclusion of locally produced soybeans in human food in minimal, despite some government and NGO [non-governmental organization] promotion work.

It remains to be seen whether the recently established solvent extraction capability in the country will process locally grown soybeans. So far, only imported soybeans have been processed on a trial basis.

During 1975-1982, the Bangladesh Agricultural University, the Bangladesh Agricultural Research Council and the Bangladesh Council of Scientific and Industrial Research [BCSIR] jointly undertook to identify the production and utilization potential of soybeans and products. One of the key recommendations called for the development of soy food recipes, and 43 of these were developed by the BCSIR team [another recommendation dealt with seed variety production]. The recipes called for soy inclusion in mainly traditional dishes, in order to increase protein and even fat content. The BCSIR team also developed soymilk and soy protein fortified biscuit production processes. Presently, two Bangladeshi companies produce soymilk and soy protein fortified nutrition biscuit. The Ministry of Disaster Management and Relief uses these biscuits in their disaster relief programmes but, in general, utilization of soy in human foods remains minimal, despite the fact that soybean is an ideal protein source in a country like Bangladesh where protein and caloric deficiencies are common.

In 2003, the City Group decided to establish a large oilseed extraction plant. Production is now ongoing at this 1,000 MT per day capacity state-of-the-art extraction facility equipped by Buhler and DeSmet. The plant is located at Rupshi, by the Sitalakshya River, approximately 20 kilo meters from Dhaka, the capital of Bangladesh. According to the City Group's plan, they will crush 50 percent soybean, 35 percent mustard and rapeseed and 15 percent sunflower. During winter [November – March] soybeans will be crushed. In this season, the demand for soybean oil increases manifold. During the hot summer months, mustard/rapeseed will be crushed. Another smaller size plant [supplied by China] was set up in Chittagong by S. Alam Group. Crushing capacity of this plant is 200 MT per day.

Presently 15 refineries are actively refining soy and palm oil. These refineries have their own coordinating organization – the Bangladesh Vegetable Refineries Association – but refineries act individually when it comes to importing. In the 1980s, the Government of Bangladesh had control over the import of CDSO but, since the early 1990s, any refinery can import CDSO.

Recently, Vietnam Vegetable Oils Industry Corporation [VOCARIMEX], a state owned enterprise has focused on Bangladesh market with their varies of products including crude and refined Soya Bean oil, Palm Oil, Coconut Oil, Cottonseed Oil, Vegetable Ghee etc.

In Vietnam, VOCARIMEX holds more than 90 percent of the market share for vegetable oils. Moreover, its products have been exported and consumed in Asian markets such as China, Taiwan, Hong Kong, Singapore, Korea, Japan and in Middle East countries.

VOCARIMEX has recently joined hands with Bangladeshi company Jethro Conglomerates for selling their products. It is learnt that, Jethro Conglomerates will be offering the VOCARIMEX products to the local wholesale markets as well as crude oil to local refineries. In addition, Jethro Conglomerates is going to introduce fat-free Vegetable Ghee produced by VOCARIMEX in the local market. Sources in Jethro Conglomerates said, the vegetable ghee produces by the Vietnamese company tastes and smells similar to ghee made from butter.

"We are working on marketing vegetable ghee at a very comfortable price to the local consumers within next couple of months. Vegetable ghee produced by Vietnam Vegetable Oils Industry Corporation will be sold in Bangladesh market in tin and bottle packing", the source said.

VOCARIMEX products have ISO 9001 certification along with Halal and Kosher certification. It has received numerous awards locally and internationally for excellence in quality. Jethro Conglomerates can be contacted regarding refined or crude soya bean oil, palm oil, coconut oil, cottonseed oil as well as vegetable ghee on: jethro [at] gmail [dot] com for further details on VOCARIMEX products.

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