Progresses and prospects of palm oil in Bangladesh

In Bangladesh, the word palm oil is synergic with Malaysia. Regardless of the import sources of palm oil, people of Bangladesh think it is from Malaysia. Such perception has developed among the Bangladeshis mainly because of Malaysia’s pioneering role in popularising palm oil. The Malaysian Palm Oil Council, a non-profit organisation supported by the Malaysian government, is engaged in market promotion of palm oil in Bangladesh since 1995. Besides, over half a million Bangladeshis, who have been working in Malaysia, are very familiar with palm oil and foods prepared using palm oil and when they return home they talk about palm oil to their family, relatives and friends.

Palm oil joined Bangladesh edible oil market in early ’70s. It suffered some difficulties in the mid-1980s but staged a dramatic comeback in early 1990s when local edible oil refineries, equipped with modern machineries and technical know-how, started to produce and market refined palm olein of world standard.

With the introduction of double fractionated olein, locally known as super olein, in the year 2000, palm olein had become more widely acceptable and popular edible oil. In the year 2003, palm olein had clinched the leading position among all the edible oils consumed in the country. Since then it is still the market leader.

The advent of palm oil in Bangladesh can be termed as blessings for the country especially when its nutritional benefits, compatibility in household cooking and uses in food industries, adequate supply against demand and affordability for majority people of the country are taken into consideration.

Progresses of palm oil in Bangladesh: The country’s annual requirement of total oils and fats in Bangladesh is about 2.30 million tonnes, of which, on an average, about 63 per cent share belongs to palm oil while 34 per cent to soybean oil, 2.0 per cent to canola/mustard oil and 1.0 per cent to others. Palm oil has been dominating edible oil sector in Bangladesh since 2003. For long successive thirteen years i.e. from 2003 to 2015, palm oil has been in the leading position with an average annual import quantity of about 955,000 tonnes i.e. about 66 per cent of total import of oils and fats against about 410,000 tonnes i.e. about 28 per cent of soyabean oil.

Consumption of palm oil in Bangladesh: consumption of palm oil in Bangladesh is projected to reach about 1.4 million tonnes in 2016, a rise by 7.44 per cent compared to 2015. During the last thirteen years, palm oil has been holding an average consumption share of 64% followed by soybean at 28% and canola/mustard oil by 8%.

Prospects of palm oil In Bangladesh: Paying a key role in revolutionising and modernisation of edible oil industry through conspicuous development, palm oil has substantially contributed in fulfilling the demand of edible oil. It helped inclusion of the lower segment of the population, mostly living in rural areas, into consumer’s community. This segment of the population was earlier unable to afford adequate edible oil for their household cooking.

Since the beginning of the 21st century, Bangladesh has proved to be a very potential and prospective market for palm oil. Its import and consumption are steadily increasing each year. Competitive price of palm oil, economic uptrend of the country, population growth, increase of income, especially in rural areas, urbanisation, upgradation of food standard and growth of food processing industries are the driving forces behind increase in demand for edible oil in the country.

With the increase of income of rural people caused from good harvest and good selling price of agricultural commodities, rural people are upgrading their food standard, which require more edible oils and fats. This is contributing to increased per capita consumption of oils and fats in rural areas where palm oil is the preferred edible oil. As about 70-75 per cent of country’s 160 million population lives in rural areas, their total sum is a great number and total sum of their consumption quantity of edible oil i.e. palm oil is also large, which is a contributing factor in increasing the consumption of palm oil in the country. These factors are contributing and would continue to contribute to increase consumption and import of palm oil in the country.

Malaysian palm oil and palm oil products: Malaysia is the second largest exporter of palm oil to Bangladesh and exported palm oil and palm oil products worth about RM 731 million (US$ 180.94 million) in 2015. It is also the second largest producer and exporter of palm oil in the world. Malaysia produced 19.96 million tonnes of palm oil in 2015 against the global production of 62.8 million tonnes, while the total export of palm oil from Malaysia was 17.45 million tonnes. In the year 2015, total 47.78 million tonnes of palm oil entered the global oils and fats export trade, which was about 57.59 per cent of total oils and fats traded in the global export market in the year.

The writer is Regional Manager – Bangladesh and Nepal, Malaysian Palm Oil Council, Regional Office.