Analysis
4 years ago

Rising trend in consumption of oils and fats in Bangladesh

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Bangladesh is a country of about 170 million people and annually consumes about 3.0 million tonnes of oils and fats, which include both edible and inedible. As revealed from the statistics of Oil World - 2019, globally recognised source of information on oils and fats, consumption of oils and fats in Bangladesh shows an increasing trend, which is highest among the developing countries. In 2019, total consumption of oils and fats was 3.04 million tonnes which is about 2.97 per cent higher compared to 2018. The average per capita consumption of oils and fats is seen approaching 18.7 kgs.

As per Oil World, during last couple of years, average per capita consumption of oils and fats in Bangladesh has increased steadily. Consumption of oils and fats, in general, is on a growing trend keeping in pace with population growth, economic development and increase of purchasing power of the general consumers. Bangladesh is experiencing steady economic growth during recent times, which is contributing greatly in increase of purchasing power of the consumers vis-à-vis increase of consumption of oils and fats.

It is worth mentioning that due to insufficient indigenous production, Bangladesh is mostly dependent on import to meet up the requirements of oils and fats. About 90 to 92 per cent of the annual requirements of oils and fats are met through import. Presently there are three major edible oils consumed in the country, namely, palm oil, soyabean oil and rapeseed/canola oil and import shares of which were at a ratio of 58:37:5 respectively, as per 2019 statistics. Palm oil is the dominating edible oil, in regards to consumption and import as well, in the country since 2003. Among the three kinds of oils, palm oil and soyabean oils are imported in crude/refined form and marketed in refined form through processing locally, while rapeseeds/canola oil is imported in seed form and crushed locally to obtain rapeseed/canola oil. Rapeseed/canola oil is traditional cooking oil in the country since ancient time, while palm oil was introduced during early '70s and soyabean oil in early '60s. Rapeseed/ canola oil is consumed in virgin form. People like the pungent smell and reddish yellow colour of rapeseed/canola oil.  

Interestingly, while the consumption of oils and fats in the country is increasing, import quantity of major two edible oils, namely, palm oil and soyabean oil, the main two contributors in meeting the local edible oils demand occupying about 85 per cent - 90 per cent, on an average, showed a significant decline, by about 7.6 per cent, in 2019 compared to 2018. In 2019, import of CDSBO (Crude Degummed Soya Bean Oil) declined by about 4.0 per cent, while import of palm oil by about 9.0 per cent.    

Naturally question may arise, how these shortfalls are being met up. The shortfall in import of major two kinds of oils was mainly compensated by the oils obtained locally through crushing of imported oilseeds, mainly soyabean, import of which witnessed a significant increase by 64 per cent compared to 2018. Owing to the increased demand of soyabean meal in the local market, which is used in poultry and cattle feed production, large numbers of soyabean crushing plants of large capacity have been set up in the country during recent years and import of soyabean also rising in a great pace with the commissioning of new soyabean crushing plants. Besides, supply of soyabean meal for local poultry, cattle and fishery industries, these plants are also contributing greatly in increased supply of soyabean oil in the local market at a comparatively cheaper price compared to imported crude degummed soyabean oil (CDSBO). It may be mentioned here that imported CDSBO are subject to 15 per cent Value Added Tax (VAT), while soyabean oil obtained locally by crushing the imported soyabean is exempted from VAT and as a result locally obtained soyabean oil is cheaper compared to imported crude soyabean oil i.e. CDSBO. Because of said financial benefit, local entrepreneurs are showing interest in setting up of soyabean crushing plants and it is expected that county's soyabean crushing capacity would be double within next the five years vis-à-vis import of soyabean also.     

According to Oil World, Indonesia is the major supplier of palm oil in Bangladesh followed by Malaysia. Argentina and Brazil are the major suppliers of CDSBO, while USA is the major supplier of Soyabean in Bangladesh followed by Argentina and Brazil.

A.K.M. Fakhrul Alam  is Regional Manager of Malaysian Palm Oil Council and looks after Bangladesh and Nepal market.

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