Highlights

Assuming a normal winter and mid-summer season (Jan-May), Bangladesh’s soybean production is expected to rise 1.96 percent to 156 thousand tons in MY 2017/18 (Jul-Jun). Competitive global market prices for soybeans will likely induce imports to increase soybean crush and raise total oil meal production to 1.02 MMT, an increase of 8.5 percent in MY 2017/18. Edible vegetable oil production and consumption are expected to increase to 235 thousand tons and 2.4 million tons, respectively. Imports will increase to reach 2.2 million tons in MY 2017/18.

Commodities

Oilseed, Soybean

Production

Given normal weather conditions, soybean production is expected to increase 1.96 percent to 156 thousand MT in MY 2017/18 (Jul-Jun). Greater farmer interest in planting soybeans will drive an increase in planted area of 1.23 percent, to a total of 82 thousand hectares in MY 2017/18. Soybeans for the MY 2016/17 were planted in January and will be harvested by May. That harvest is forecast to be 153 thousand MT. Among oilseeds in Bangladesh, in FY 2015-16 soybeans are the fourth crop in terms of total planted area at 9% of total oilseed planted area; mustard dominates with 68%, followed by sesame, groundnuts and others (sunflower, linseed) at 12%, 10% and 1% respectively. About 70 percent of soybean farmers are cultivating variety “Shohag”, which was officially released in 1990; its average yield is 1.8-2 ton per hectare. Bangladesh Agricultural Research Institute (BARI) developed variety BARI Soybean-5 and BARI Soybean-6 which is planted by some 30 percent of soybean farmers. These high yield BARI varieties are popular, but supply constraints limit their impact in the field and overall yields remain flat, which in turn hinders growth of this subsector.

Poor soil and competing crops limit area available for soybean cultivation. Soybean competes with crops like winter rice (Boro season rice) and ground nut in the river basin islands (charland) of the southern coastal part of the country. Charland is available for soybean cultivation because poor irrigation facilities and increasing salinity in the late winter and summer season make charland unsuitable for Boro season rice production. Soybean cultivation in general requires less irrigation and less fertilizer. The lower production costs coupled with good market prices give farmers a premium for soybeans and ground nuts compared to Boro rice. A recent study showed that return on investment for soybean cultivation is as high as 43%, compared with 26% for ground nuts and just 4% for Boro rice.

It was stated above that just 9% of planted crop area in Bangladesh is soybean, whereas nearly 70% is mustard. That in large part reflects the priorities of the Bangladesh Agricultural Research Institute (BARI) and Bangladesh Institute of Nuclear Agricultural (BINA), which are funded by the government of Bangladesh. These institutes’ current research efforts for soybean are just 10% of total oilseed research, compared with 70% for mustard. Palm cultivation for commercial use is yet to start. Some farmers are trying to raise palm at a non-commercial scale, but palm production does not receive the support of Bangladesh extension services.

Consumption

Soybean consumption as a grain or any other non-oil form is expected to rise marginally to 6 thousand MT in MY 2017/18 driven by increased production of various soy-based processed foods like soy flower, tofu and changing consumer behaviour in relation to more health consciousness.

Trade

Soybean imports in MY 2017/18 are projected to rise 2.17% percent to 1.17 MMT due to increased demand both for raw materials used in animal feed and for soybean oil used in consumer products. In MY 2016/17, imports are expected to rise to 1.15 MMT on strong demand in the crushing industry. In the budget FY 2016/17, the government of Bangladesh increased tariffs on soymeal to 5 percent, which favored crushing of whole beans in Bangladesh to avoid tariffs.

Commodities

Meal, Soybean

Production

Strong soybean imports and domestic production have enabled soybean crushing plants to increase soymeal production. The surge of soybean imports pushed soymeal production to 940 thousand MT in MY 2016/17. In MY 2017/18, soymeal production is projected to increase 8.5 percent to 1.02 MMT as driven by increased demand in the feed industry. Since 100 percent of imported soybean is crushed to produce meal and oil, the surge in imports of soybean largely displaced imports of soymeal. The two major oilseed crushing plants in Bangladesh have estimated capacity of total 7000 MT/day, and they have facility to crush soybean, mustard and rapeseed. The tariff on soymeal will likely lead to the establishment of three more crushing plants soon.

Consumption

The growing poultry, cattle, and aqua industry’s demand for feed has induced more soymeal consumption and is estimated to raise total feed usage to 1.2 MMT in MY 2016/17. Assuming a normal pace on feed consumption in the poultry, aqua and livestock sector in MY 2017/18, total feed usage is projected to grow 8 percent to 1.3 MMT. The investment in the poultry sector is increasing as the sector ramps up to reach capacities needed to drive exports.

The total poultry farms of all sizes number about 65-70 thousand and are growing at the rate of 15% per year. Aqua culture farms number about 2 million and the area under production (metric tons per hectare) is increasing at 5.7% per year. A total of 100 fully automated feed mills, and 45 small and medium feed mills, produce 7.26 MMT of feed for the livestock sector, including poultry (3.61 MMT), cattle (2.22 MMT), and aqua culture (1.43 MMT). Raw materials used for poultry feed production include maize (55-65 percent), soybean meal (20-25 percent), mustard oil cake (10-25 percent), rice bran (rice by product) (10-20 percent), and meat and bone meal (10-20 percent). The demand for soybean in poultry feed is estimated at 0.94 - 1.13 MMT in CY 2015.

Trade

Imports of soybean for crushing in country as well as increased domestic soybean production will drive down soymeal imports by a projected 7.14 percent to 325 thousand MT in MY 2017/18. For the same reasons, soymeal imports are estimated to be down to 350 thousand MT in MY 2016/17.

Commodities:

Oil, Soybean

Oil, Palm

Production:

Human consumption and feed mill industry use as raw materials will drive oil production to an estimated 220 thousand MT in MY 2016/17. And for MY 2017/18, projected increases in soybean production and imports will drive total soybean oil production to rise 6.8 percent to 235 thousand MT. In Bangladesh 80 oil refineries have total production capacity of 2.9 million MT but they are utilizing only 48% of production capacity. The excess capacity is available to supply the growing demand for edible oil.

Consumption

Total edible oil consumption is forecast to rise 2.7 percent to 2.4 MMT in MY 2017/18 owing to increased population, rising income levels, changing consumer behavior, and increasing oil use as an ingredient in various feeds. Palm oil will constitute 1.5 MMT of consumption; soy oil, 0.9 MMT. Per capita consumption of edible oil is 11.25 kg per year. Most households prefer soybean oil for cooking purposes, but such oil is often blended with palm oil. Edible oils sold in bulk constitute 75% of the market, a segment in which palm oil dominates, while soybean oil is the dominant oil in the bottled vegetable oil market.

Besides general cooking purposes, palm oil is also the dominant oil for food processing industries (13%) and shortening/Vanaspati (fully or partially hydrogenated vegetable cooking oil) industries (20%); it is also used in the paint industry. Increases in fast food consumption as well as higher incomes in rural areas have driven consumption of palm-soy oil mixes as well. On March 02, 2017, wholesale prices for bulk soybean oil were BDT 90 - 91 ($1.12 – 1.13) per liter; bulk retail soybean oil was selling for BDT 95- 96; super-palm (palmolein) was selling for BDT 76 - 80 per liter.

Trade

The import pace for edible oils in MY 2016/17 is estimated to grow to 2.1 MMT, which includes 620 thousand MT soybean oil, and 1.5 MMT palm oil. Rising domestic consumption for diverse uses will nudge imports up to 2.2 MMT in MY 2017/18, up 0.7 percent over the current year. For soybean oil the import forecast is 610 thousand MT and for palm oil, 1.5 MMT. Bangladesh also imports soybean and mustard in seed form to be crushed and sold locally. Other oil imports include crude soybean oil, crude palm oil, and crude palmolein.

Policy

For its FY 2016/17, the Government of Bangladesh (GOB) adopted a new tariff structure for importing soybean, soymeal and edible oil. GOB has an open trade policy (no tariffs) for soybean and soybean oil. This duty free policy for soybeans is intended to support the local crushing industry to ensure local supply of soymeal at a lower price. But, since the duty on soymeal has stifled imports, feed millers are in fact seeing increased costs for soymeal as a result of collusion and price-fixing among the leading domestic seed crushing plants. There are no quotas on import of oilseeds and related products. Regarding biosafety restrictions, biosafety rules detail guidelines to follow for importing GE product, but the approval mechanism for importing such shipments is not widely understood or implemented; most GE product is not subject to additional inspection requirements.

Oilseed, Soybean

Market Begin Year

Bangladesh

2015/2016

2016/2017

2017/2018

Jul 2015

Jul 2016

Jul 2017

USDA

Official

New

Post

USDA

Official

New

Post

USDA

Official

New

Post

Area Planted

0

80

0

81

0

82

Area Harvested

0

80

0

81

0

82

Beginning Stocks

21

21

135

187

0

281

Production

0

152

0

153

0

156

MY Imports

1123

1123

1200

1150

0

1175

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

1144

1296

1335

1490

0

1612

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Crush

1000

1100

1250

1200

0

1300

Food Use Dom. Cons.

5

5

5

5

0

6

Feed Waste Dom.

4

4

4

4

0

5

Total Dom. Cons.

1009

1109

1259

1209

0

1311

Ending Stocks

135

187

76

281

0

301

Total Distribution

1144

1296

1335

1490

0

1612

Meal, Soybean

Market Begin Year

Bangladesh

2015/2016

2016|2017

2017|2018

Jul 2015

Jul 2016

Jul 2017

USDA

Official

New Post

Official USDA

New Post

Official USDA

New Post

Crush

1000

1100

1250

1250

0

1300

Extr. Rate,

0.787

0.7818

0.7552

0.752

0

0.7846

Beginning Stocks

34

34

147

148

0

184

Production

787

860

944

940

0

1020

MY Imports

495

458

300

350

0

325

MY Imp. from

0

96

0

90

0

0

MY Imp. from

0

0

0

0

0

0

Total Supply

1316

1352

1391

1438

0

1529

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom.

4

4

4

4

0

4

Feed Waste Dom.

1165

1200

1300

1250

0

1350

Cons.

Total Dom. Cons.

1169

1204

1304

1254

0

1354

Ending Stocks

147

148

87

184

0

175

Total Distribution

1316

1352

1391

1438

0

1529


Oil, Soybean

2015/2016

2016/2017

2017/2018

Market Begin

Bangladesh

Jul 2015

Jul 2016

Jul 2017

USDA

Official

New Post

Official

USDA

USDA

Official

New Post

Crush

1000

1100

1250

1200

0

1300

Extr. Rate

0.182

0.1818

0.1816

0.1833

0

0.1808

Beggining Tocks

25

25

125

139

0

104

Production

182

200

227

220

0

235

MY Imports

639

639

600

620

0

610

MY Imp. From US

3

0

3

0

0

0

MY Import from EU

0

0

0

0

0

0

Total Supply

846

864

952

979

0

949

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom.Cons.

96

100

98

100

0

100

Food Use Dom.

625

625

750

775

0

800

Feed Waste Dom. Cons.

0

0

0

0

0

0

Total Dom. Cons.

721

725

848

875

0

900

Ending Stocks

125

139

104

104

0

49

Total

846

864

952

979

0

949

Oil, Palm

2015/2016

2016/2017

2017/2018

Market Begin Year

Jul 2015

Jul 2016

Jul 2017

Bangladesh

USDA

Official

New

Post

USDA

Official

New

Post

USDA

Official

New

Post

Area Planted

0

0

0

0

0

0

Area Harvested

0

0

0

0

0

0

Trees

0

0

0

0

0

0

Beginning Stocks
31

31

131131

0

171
Production0

0

00

0

0

MY Import1511

1511

15001550

0

1575

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

00

0

0

Total Supply

1542

15421

163116810

1746

MY Exports

0

0

00

0

0

MY Exp. to EU

0

0

00

0

0

Industrial Dom. Cons.

100

100

100

100

0

100

Food Use Dom. Cons.

1311

1311

1400

1410

0

1450

Feed Waste Dom. Cons.

0

0

0

0

0

0

Total Dom. Cons.

1411

1411

1500

1510

0

1550

Ending Stocks

131

131

131

171

0

196

Total Distribution

1542

1541

1631

1681

0

1746