Soybean oil imports, both in crude and seed forms, declined marginally in Bangladesh in the current fiscal year as businesses are cautious in buying the raw materials at higher volumes despite surging prices of edible oil locally amid concerns that higher prices would drive down consumption. But an increase in supply could be one of the crucial tools to cool off the volatile cooking oil market. Bangladesh Bank data stated that refined palm stocks are adequate to meet Ramzan’s requirements when monthly demand increases to nearly 3 lakh tonnes from around 2 lakh tonnes.
Between July 1 and February 15 of FY 2021-22, the amount of crude soybean oil for which letters of credit (LCs) were opened grew 7 per cent year-on-year to 4.89 lakh tonnes. But the arrival of crude soybean oil, as reflected in the LC settlements, declined marginally to 3.73 lakh tonnes from 3.75 lakh tonnes a year ago. With the recovery rate of edible soybean oil from its crude form being 95.25 per cent. Interest in importing soybean seeds by crushing mills also waned during the period as the opening and settlement of the LCs declined.
Businesses opened LCs to import 6.05 lakh tonnes of seeds, a year-on-year drop of 14 per cent. Settlement of the LCs, or arrival of seeds, decreased 3 per cent to 6.05 lakh tonnes. Some 17 per cent of edible soybean oil is extracted from soybean seeds. As prices are on the upward in the international market, we are importing soybean as much as is needed. Soybean prices have been soaring for the last couple of months, influenced by concerns of reduced supply for dry weather in Brazil and Argentina, two major producers and exporters of soybean.
Soybean prices have jumped in response to the decrease and forecast of tight stocks. To address the growing demand for edible oil, the Agriculture Ministry can train farmers, provide soft loans and high yielding soybean seeds for farming in char islands across the riverine areas. Besides soybean, sunflower, mastered and rice bran oil could be alternative.
