Soybean oil consumption falls as consumers switch to mustard, palm oils
27/03/2024 (The Daily Star) - Consumption of soybean oil in Bangladesh has declined as a section of consumers have switched to the relatively cheaper mustard and palm oils, according to a report by the US Department of Agriculture (USDA) last week.
"The increased demand for palm oil at the household level and increased mustard production has led to a decrease in the demand for soybean oil," said the report on oilseeds used by Bangladesh.
As such, annual consumption of soybean, which was 9.85 lakh tonnes in the marketing year 2022-23, is estimated to decline to 9 lakh tonnes this marketing year (MY) ending in upcoming June.
For the following MY beginning from July, consumption of soybean oil is forecast to increase to 9.6 lakh tonnes.
Meanwhile, use of both palm oil and mustard or rapeseed oil is projected to increase.
"In Bangladesh, mustard oil has become very competitive since 2022, when the price of soybean oil reached a record high," said the USDA.
Mustard cultivation increased substantially in MY23 and MY24 due to government initiatives.
"This rise in mustard oil production has led to a decrease in the demand for soybean oil in the local market."
The US agency said mustard oil consumption might rise to 6.63 lakh tonnes in MY25. Two years ago, its annual consumption stood at 5 lakh tonnes.
Likewise, the consumption of palm oil, a cheaper alternative to soybean and mustard oils, is likely to grow to 17 lakh tonnes, up 3 percent year-on-year.
So, Bangladesh, which is largely dependent on edible oil imports, is expected to purchase a higher volume of palm oil from abroad for the next marketing year, the report projected.
The US agency said palm oil is widely used in the food processing industry. "There are some industrial uses of palm oil that includes making lubricants, inks, cosmetics, and soaps," it said.
Bangladesh imports crude soybean oil mostly from South America.
In MY23, Bangladesh imported 48 percent of its crude soybean oil from Brazil, 46 percent from Argentina and five percent from Paraguay, said the USDA.
The report, however, projected a spike in Bangladesh's soybean imports to 20 lakh tonnes for MY25 from 18 lakh tonnes in the current marketing year as local seed crushing mills are forecasted to increase soybean oil production.
Local seed crushing mills may produce 3.85 lakh tonnes of soybean oil for MY25 from 3.5 lakh tonnes estimated in the current marketing year.
With this, overall consumption of edible oil -- soybean, palm and mustard oil -- is forecast to rise to 33.2 lakh tonnes, which would be 4 percent higher year-on-year.