THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Date: GAIN Report Number: Approved By: Prepared By: Report Highlights: Soybean area and production levels for MY 2018/19 (July-June) are projected to increase to 80 thousand hectares (HA) and 152 thousand metric tons (MT) respectively, due to a switch from Boro rice production. Post’s soybean planting area and production estimates for MY 2017/18 are lowered to 60 thousand HA and 114 thousand MT due to unsuitable conditions for planting at the optimal time, and the shift of land to Boro rice cultivation due to an expected higher harvest price. MY 2018/19 soybean and soymeal imports are estimated to increase to 1.1 MMT and 550 thousand respectively, to keep pace with demand in the feed industry, as well as growth in the livestock and fisheries sectors. The import of edible oil for MY 2018/19 is forecast at 2.4 MMT on expected lower international prices and fast growing demand by an increasing population. Tanvir Hossain, Agricultural Specialist Mark A. Myers, Agricultural Attaché 2018 Oilseeds and Products Annual Bangladesh BG1802 3/19/2018 Required Report - public distribution
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Bangladesh Oilseeds and Products Annual 2018 · 3/19/2018 · Table 5). That in large part reflects the priorities of the Bangladesh Agricultural Research Institute (BARI) and Bangladesh
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THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY
USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
POLICY
Date:
GAIN Report Number:
Approved By:
Prepared By:
Report Highlights:
Soybean area and production levels for MY 2018/19 (July-June) are projected to increase to 80
thousand hectares (HA) and 152 thousand metric tons (MT) respectively, due to a switch from Boro rice
production. Post’s soybean planting area and production estimates for MY 2017/18 are lowered to 60
thousand HA and 114 thousand MT due to unsuitable conditions for planting at the optimal time, and
the shift of land to Boro rice cultivation due to an expected higher harvest price. MY 2018/19 soybean
and soymeal imports are estimated to increase to 1.1 MMT and 550 thousand respectively, to keep pace
with demand in the feed industry, as well as growth in the livestock and fisheries sectors. The import of
edible oil for MY 2018/19 is forecast at 2.4 MMT on expected lower international prices and fast
growing demand by an increasing population.
Tanvir Hossain, Agricultural Specialist
Mark A. Myers, Agricultural Attaché
2018
Oilseeds and Products Annual
Bangladesh
BG1802
3/19/2018
Required Report - public distribution
Commodities:
Oilseed: Soybean
Production:
Post forecasts marketing year (MY) 2018/19 cultivation area for soybean at 80 thousand hectares (HA).
Assuming normal weather conditions during the planting and growing stage and average yield, soybean
production is forecast to increase by 33 percent to 152 thousand MT in MY 2018/19 (Jul-Jun) due to
increased production area compared to MY 2017/18.
Post estimates a 27 percent reduction in cultivated area to 60 thousand hectares compared to USDA
official estimates in MY 2017/18. Farmers switched to Boro rice cultivation with an expectation of a
higher price for unhusked rice (paddy), and a shortage of seed for planting. In addition, some farmers
were unable to plant soybeans at the appropriate time, as the land was not in optimal condition for
planting due to water stagnation. Soybeans for MY 2017/18 were planted in January-February and will
be harvested by April-May. Post forecasts five percent lower production to 114 thousand MT in MY
2017/18 due to lower cultivated area based on a normal yield of 1.9 MT/ha.
Post also estimates 21 percent lower production to 120 thousand MT in MY 2016/17 due to crops
damaged by heavy rainfall just before the harvest in mid-April 2017. The harvested area in that market
year is also estimated lower at 65 thousand hectares compared to planted area of 81 hectares.
Among oilseeds in Bangladesh, in fiscal year (FY) 2016-17, soybeans are the fourth ranked crop in
terms of total planted area at 9.82% of total oilseed planted area; mustard dominates with 67%, followed
by sesame (10.88%), groundnuts (11.55%) and others (sunflower, linseed) respectively (Figure 2) (See
Table 5). 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.
About 70 percent of soybean farmers are cultivating the 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 the area available for soybean cultivation. Soybean competes with
crops like rice (Boro season rice), ground nut, and sunflower 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 water 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 other seasonal crops.
Palm cultivation for commercial use is starting at a nascent level. Some farmers are trying to raise palm
at a farm-level scale, but palm production does not receive the support of Bangladesh extension services.
Consumption:
In MY 2018/19 soybean crushing is expected to increase by 4.35 percent to 1.2 million MT due to
gradual increased capacity of millers to meet the steady demand of soymeal for the feed industry, and
the rising demand of animal protein and soybean oil for human consumption.
Human consumption as a grain, or any other non-oil form, is expected to be stable at five thousand MT
in MY 2018/19, driven by production of various soy-based processed foods and food supplements in
relation to more health consciousness by the consumer.
Growth and expansion of the feed industry, as well as the poultry and livestock sectors, is a result of
increasing consumption of meat, eggs and fish. Compared to CY 2010, the per capita consumption of
chicken was increased by 54 percent, egg consumption by 89 percent and fish intake increased by 26
percent in CY 2016 (See Table 6).
Trade:
Post estimates soybean imports in MY 2018/19 are projected to rise by 4.76 percent to 1.1 MMT due to
increasing demand for soymeal as raw materials used in animal feed and for soybean oil use in daily
cooking. In MY 2017/18, imports are expected to rise to 1 MMT on strong demand in the crushing
industry. Soybeans imported from the United States (US) account for 93 percent market share, with 9
percent growth rate annually, with a forecasted rise in imports to 1.05 MMT in MY 2018/19. A poultry
feed sector insider reported that leading poultry producers put emphasis on quality feed that has a higher
protein percentage. Feed with US soybean-sourced soymeal has extra value when farmers demand high
quality feed. Feed used in egg production also prefer US soybean based soymeal, realizing that it
improves egg quality.
Commodity:
Oil Meal: Soymeal
Production:
Domestic soymeal production is shares 64 percent of the demand generated by stable and expanding
feed industries. In MY 2018/19, post forecasts soymeal production to increase by 4.49 percent to 930
thousand MT driven by increasing demand in the feed industries. Feed industries are expanding to
supply feed for not only poultry and other livestock sectors, but also for the aquaculture sector which is
growing nine percent annually and produced 2.33 million MT of fish in FY 2016-17.
The two major oilseed crushing plants in Bangladesh have an estimated capacity of 4,200 MT/day (max
7000 MT/day), with the facility to crush soybean, mustard and rapeseed. Since 100 percent of imported
soybean is crushed to produce meal and oil, the surge in imports of soybean gradually reduces the yearly
percentage increase in imports of soymeal. Sources indicate that the increased tariff on soymeal will
likely lead to capacity expansion and establishment of more crushing plants. Strong soybean imports and
domestic production have enabled soybean crushing plants to increase soymeal production.
Consumption:
Based upon the normal increasing pace of feed demand and consumption in the poultry, aqua and
livestock sectors in MY 2018/19, feed waste and domestic consumption is projected to grow by 3.57
percent to 1.45 MMT. Investment in the aqua and poultry sector is increasing as the sector ramps up to
reach capacities to supply increasing demands for protein consumption. The poultry sector contributes
86 percent of livestock sector production and cultured fisheries share 57 percent of the total fish
production in the country. The growth of contribution to Gross Domestic Product (GDP) by the fisheries
sector is 6.23 percent and 3.31 percent by livestock sector in FY 2016-17, which is higher than
agriculture and forestry sector (1.96 percent).
Industry reports indicate that poultry farms of all sizes number about 65-70 thousand and are growing at
the rate of 10-15% per year. Aquaculture 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 aquaculture (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). According to the report, demand for soybean in poultry feed is forecasted at
1.65 - 1.97 MMT by 2020 (See Table 13).
Trade:
Imports of soybean for crushing, as well as increased domestic soybean production, will marginally
drive soymeal imports by a projected 10 percent rise to 550 thousand MT in MY 2018/19. For the same
reasons, soymeal imports are estimated to be 500 thousand MT in MY 2017/18. India (57%), Brazil
(18%) and the U.S. (17%) are the major players in exporting soymeal to Bangladesh.
Commodity:
Oil: Soybean oil and Palm oil
Production:
In MY 2018/19, projected increases in soybean production and imports will drive total soybean oil
production to rise 4.9 percent to 214 thousand MT. Increases in human consumption through diversified
utilization will drive soybean oil production to an estimated 204 thousand MT in MY 2017/18.
A number of 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.
There is no domestic palm oil production industry in the country. Some farmers are cultivating palm
trees on a limited scale and extracting oil in small amounts for retail and family consumption.
Consumption:
Per capita consumption of edible oil was 26.75 grams/day in year 2016. Although total food intake was
reduced to 975.53 grams/day in 2016 from 999.99 grams/day in 2010, edible oil consumption has
increased by 30.4 percent in 2016 from 20.51 grams/day in 2010 to 26.75 grams/day (See Table 6).
Post’s edible oil (soybean oil and palm oil) consumption is forecast to rise by 6.72 percent to 2.7 MMT
in MY 2018/19 owing to an increased population, rising per capita income levels, and increasing oil use
as an ingredient in processed food. Palm oil will constitute 1.58 MMT of consumption; soy oil, 1.12
MMT. Other minor edible oils such as mustard/rapeseed oil, rice bran oil, sesame oil, sunflower oil are
not included in this report.
In February 2018, retail prices of soybean oil ranged from BDT 85-88 (US$1.02-1.06) per liter and palm
oil was BDT 70-72 (US$0.84-0.87) per liter. The soybean price per liter has increased 1.76 percent from
July 2017 to February 2018. On the other hand, palm oil remains unchanged since July 2017.
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.
Trade:
In MY 2018/19, post forecasts a rise in soybean oil imports by 5.88 percent to 900 thousand MT and a
6.9 percent increase in the import of palm oil to 1.55 MMT. The trend in diverse processed foods
consumption, and keeping pace with population and urbanization have fueled the continued rise of
vegetable oil imports.
In MY 2017/18, soybean oil imports are estimated to rise by 2.41 percent to 850 thousand MT which is
3.4 percent lower than the USDA official number. Palm oil imports are forecasted to move up by 10.35
percent to 1.45 million MT owing to continued lower prices in the market and increased consumption in
the upcoming month of Ramadan. Increased vegetable oil import tariff by India, and expected lower
price trend in the international market may support importing more palm oil. Argentina (63%) and
Paraguay (22%) are the major players in the soybean oil export market, while Indonesia (78%) and
Malaysia (22%) supply the largest shares of palm oil to the country. 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 palm olein.
Policy:
In FY 2017/18, the Government of Bangladesh (GOB) revised its tariff structure for importing soybean,
soymeal, soybean oil and palm oil (See Table 23, 24 and 25). GOB has an open trade policy (no tariffs)
for soybean, but 10% regulatory duty has been imposed on soymeal in FY 2017/18 which was 10%
custom duty in earlier FY 2016/17. The duty shift from custom duty to regulatory duty reduced 0.4
million MT soymeal imports from India under SAFTA trade agreement. Under that agreement,
importers can import tax free soymeal max 0.4 MMT from India when there is 10% custom duty. The
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 only two domestic
giant seed crushing plants. To control an increasing price in the domestic market and reduce risk of fully
depending on local soymeal producers, feed millers are continuing to import soymeal in moderate
amounts.
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 nor implemented;
most GE product is not subject to additional inspection requirements.