Palm oil: The highest consumed edible oil in Bangladesh

In Bangladesh, palm oil is now a very familiar edible oil. In this country, palm oil is synonymous with Malaysia. Whatever be the source of import of palm oil, Bangladeshi people think that it is from Malaysia. Palm oil made its debut in Bangladesh in the decade of 1970s. At that time, it was imported from Singapore in refined form in packed containers. It was first imported in bulk in crude form from Malaysia. That is why, to Bangladeshi people, palm oil means Malaysian palm oil. Besides, about half a million Bangladeshi workers are now working in Malaysia, some of whom are working in oil palm plantations. Returning home, they talk about Malaysian palm oil to their relatives and friends, which contributed in having the perception of the Bangladeshi people that Malaysia is the sole producer of palm oil. In fact, during 1990s Malaysia was the main supplier of palm oil to Bangladesh market. But after 2000, with the exception of a few years, Indonesia became the major supplier of palm oil in Bangladesh market due to competitive price of Indonesian Palm Oil (IPO) and aggressive marketing strategy of IPO suppliers.
IMPORT OF PALM OIL VIS-À-VIS TWO OTHER MAJOR EDIBLE OILS: Palm oil entered the global market in the decade of 1960s. With the passage of time, it became the highest produced and highest traded edible oil in the world. In Bangladesh, palm oil became the market leader in 2003 putting an end to the domination of soyabean oil, which was market leader for more than three decades in this country. Since then palm oil has retained its leadership in Bangladesh oils and fats market. Annual import volume of palm oil was about 0.15 million tonnes in the 1990s, which increased to 1.26 million tonnes in 2013. Palm oil's market expanded in Bangladesh due to its compatibility as cooking oil and as a suitable ingredient for the food processing industries and also due to its competitive price compared to other edible oils.
Palm, soyabean and canola/mustard oils are the three major edible oils consumed in the country. Palm oil is imported in both crude and refined form, while soyabean oil is imported in crude form only. However, some quantities of soyabean and canola/mustard seed are also imported, which are crushed locally to obtain respectively soyabean oil and canola/mustard oil. Crude soyabean oil obtained by crushing imported soyabean, is refined and marketed thereafter while canola/mustard oil obtained by crushing imported seed, is consumed in crude form.
In 2013, the import of palm oil set the highest record. The import of palm oil in 2013 was 1,256,581 tonnes, which is higher by 22.33 per cent than the previous highest import quantity of 1,027,194 tonnes achieved in 2012. On the other hand, in 2013, import of CDSBO (Crude Degummed Soybean Oil), the main competitor of palm oil was 354,436 tonnes, which declined by 20.35 per cent compared to 2012. During the period, a quantity of 575,540 tonnes of soyabean was imported, the oil equivalent of which is 99,089 tonnes. Import of soyabean increased by 111.43 per cent compared to 2012. The total soyabean oil i.e. CDSBO and crude soyabean oil obtained from imported soyabean together was 453,525 tonnes, which declined by 7.80 per cent compared to 2012. During the period, the import of canola/mustard seed was 93,434 tonnes, the oil equivalent of which is 35,505 tonnes. Import of canola seed declined by 45.19 per cent compared to 2012.
It is evident that the demand for palm oil in the country is showing an increasing trend, which boosted its import substantially in 2013. Good price of agricultural commodities helped to upgrade the lifestyle and simultaneously the food habit of rural people who comprise about 70-75 per cent of the population of the country and contributed to increasing the consumption of cooking oil in the rural areas where mostly palm oil is used because of its competitive price. Besides, increased use of palm oil by local food processing industries, which is in increasing trend with rapid growth of urban population, also contributed to the country's increased consumption of palm oil extent.

Note: Palm oil includes imported Crude Palm Oil, Crude palm Olein, & RBD Palm oil/Olein; Soyabean oil includes imported CDSBO and crude soyabean oil equivalent of imported soyabean at 17 per cent oil extraction; Canola/Mustard oil is the oil equivalent of imported seeds at 38 per cent oil extraction.

Among the three major edible oils, import shares of palm, soyabean and canola/Mustard seed oils were respectively in the ratio 72:26:2 in 2013, which were respectively 65:31:4 in 2012. Besides the major three edible oils, a quantity of 2,202 tonnes of refined edible oils other than palm oil, 110 tonnes of butter oil and 1,344 tonnes of palm-based fats were also imported in 2013 to meet the local demand. Apart from that, 14,465 tonnes of coconut oil and 7,429 tonnes of palm fatty acid distillate PFAD/Acid oil (palm fatty acid distillate) are imported as raw materials for cosmetic and soap industries and 6,545 tonnes of PKO (Palm Kernel Oil) was imported as raw material for ice cream and chocolate industries.
IMPORT OF MALAYSIAN PALM OIL: Import of Malaysian palm oil (MPO) remarkably increased in 2013 in the country and was approaching towards half a million tonnes. Import quantity of MPO in 2013 was 460,271 tonnes, which increased by about 71 per cent compared to 2012.
CONSUMPTION OF MAJOR THREE EDIBLE OILS: The major three edible oils consumed in Bangladesh are palm, soyabean and canola/mustard oil.
Palm oil in the form of palm olein is the highest consumed edible oil followed by soyabean and canola/mustard oil.
During the last five years, palm oil has been holding a market share of about 63-69 per cent while soyabean oil's share was around 23-29 per cent and canola/mustard oil's 5-10 per cent.

About 80 per cent of oils and fats consumed in the country annually are sold in loose form. Palm oil dominates in the loose sale market while soyabean oil dominates in the consumer pack market. Palm oil is used as cooking oil and also as one of the important raw materials for shortening/vanaspati and food industries.
Local vanaspati/shortenings-producing industries are one of the major consumers of oils in the country producing about 250,000 tonnes of vanaspati/shortening annually. Among the processed food industries, bakery industries are the major consumer of oils and fats. There are about 3,000 bakeries in the country, mostly non-mechanised and together they are producing annually about 6000,000 tonnes of biscuits and bakery products and consume about 100,000 tonnes of oils and fats annually. Biscuit and bakery industries prefer to use palm oil whether in liquid or solid form.
In Bangladesh, vanaspati/shortening is now being produced only from palm oil. Besides, other food industries namely, potato chips, fried snack foods, instant noodles, condensed milk, chocolate industries, etc. preferably use palm oil. Apart from the food processing industries, hotels & restaurants and fast food industries also consume a considerable quantity of palm oil and vanaspati/shortenings. Chocolate and ice cream industries are the consumers of palm kernel oil while soap industries are the consumers of Palm kernel oil, palm stearin and palm fatty acid/acid oil.

EXPANDING MARKET: Palm oil's market is expanding worldwide. It is no wonder that the same thing is happening in Bangladesh also. In 2013, there was a boom in palm oil import in the country, which registered a robust increase of 22.33 per cent with a volume of about 1.26 million tonnes. Import of Malaysian palm oil in Bangladesh witnessed a remarkable increase of 71 per cent over that of 2012 and the import volume is approaching half a million tonnes.
It is expected from the increasing import trend that by the next five years, the volume of annual import of palm oil into Bangladesh would reach two million tonnes.
The writer is Regional Manager of Malaysian Palm Oil Council
(MPOC) for Bangladesh,
Myanmar and Nepal.
 [email protected]