City residents drive rice bran oil demand

Demand for antioxidant-rich rice bran oil is gradually rising among the health conscious city dwellers, which may reduce dependence on imported soybean oil, industry insiders said.
According to wholesalers and retailers, after an intense awareness campaign, particularly among housewives, demand for the rice bran oil increased from 15-20 tonnes a day in 2012 to 70-100 tonnes now.
Demand for the rice bran oil has been rising by around 20 per cent for the last couple of years, they added.
The oil is extracted from husking the hard, brown outer layer of rice.
Leading consumer goods companies including ACI, City Group and Emerald Oil Industries Ltd have introduced branded rice bran oil due to the increasing demand.
 "Rice bran oil is rapidly replacing other oil. Almost all the grocery shops across the city are now selling the oil which would rarely seen in such stores reflecting the steady rise in demand for the item," Moinur Rahman, manager of ACI Consumer Brands that markets rice bran oil under the name of 'Nutrilife' told the FE.
But it was not all plain sailing. Introduced in Bangladesh in 2011, the cooking oil had to get past plenty of misconceptions.
"We had faced a lot of difficulties during the initial days-- people were not aware of the existence of rice bran oil and its health benefits. Many even perceived it to be engine oil," said Mazharul Islam, a manager of Emerald Oil Industries Ltd (EOIL).
One reason for rice bran oil's rising popularity is the reduction in its prices.
The price of each litre of rice bran oil was Tk 40 higher than soybean oil during the initial days. But the gap has now come down to Tk 20 each litre, said Mr Rahman.
He noted that rice bran oil's growing demand has also helped bring down the country's import dependency for cooking oil especially on soybean oil.
At present, the country spends over Tk 100 billion (10,000 crore) a year to import 1.4 million-1.5 million tonnes of edible oil against the domestic demand of 1.8 million tonnes, according to Bangladesh Bank and industry estimates.
"The rice bran oil holds a very good market potential. We have the raw materials and there are many rice mills that can supply it," the ACI official said.
The country produces more than 50 million tonnes of paddy a year, which yields 4.0 million tonnes of rice bran, according to estimates by agricultural scientists.
ACI entered this segment of cooking oil market in 2012 when only EOIL and Rashid Oil Mills had started extracting oil by using locally available rice bran. Now, there are around eight firms, including Bangladesh Edible Oil Ltd.
City Group of Industries, a leading cooking oil processor and marketer, is also set to make its entry to this segment of cooking oil.
Biswajit Das, general manager of City Group, said the company has already set up machinery for the plant.
"The number of health conscious buyers is rising day by day -- that's why we are also interested in expanding our business into this sub sector."
The existing players too have expanded their production capacity on the back of the rising popularity.
EOIL, now listed on the bourses, increased its processing capacity last year and began production of its expanded unit in November 2013. Currently, its total production capacity stands at 48 tonnes a day.
Mr Islam said the company now produces around 40 tonnes of rice bran oil a day.
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