Top 11 Agro Processing Sectors in Bangladesh
Md. Joynal Abdin*
Co-Founder & CEO of Bangladesh Trade Center
To ensure long-term food security for people, a profitable, sustainable and environment-friendly agricultural system is crucial. Broad agriculture sector and rural development sector have been given the highest priority in order to make Bangladesh self-sufficient in food.
Over the last few years, there has been an increasing trend in food production. According to BBS, in FY 2015-16, food grains production stood at around 389.97 lakh metric tons (MT). In the same fiscal year, the total internal procurement of food grains was 17 lakh MT, total import of food grains through public and private sectors was 52.74 lakh MT.
To scale up productivity, subsidy in agricultural inputs was increased, as well as enhanced coverage and increased availability of agricultural credit ere ensured. Crop insurance has been introduced to provide the small and medium farmers with price support in the event of crop failure. Programs have been launched to popularize the use of organic and balanced fertilizer to maintain soil fertility and productivity. Considering the importance of increased productivity of agricultural products, an amount of Tk. 9,000.00 crore was allocated in the revised budget of FY 2015-16 to provide subsidy on fertilizer and other agricultural inputs.
Agriculture is the largest employer in the country by far; and 47.5% of the population is directly employed in agriculture and around 70% depends on agriculture in one form or another for their livelihood . Agriculture is the source of food for people through crops, livestock, fisheries; the source of raw materials for industry, of timber for construction; and a generator of foreign exchange for the country through the export of agricultural commodities, whether raw or processed.
It is the motor of the development of the agro-industrial sector including food processing, input production and marketing, and related services. As main source of economic linkages in rural areas, it plays a fundamental role in reducing poverty, which remains a predominantly rural phenomenon. The role of agriculture is also fundamental in promoting nutritious diets, especially in the countryside where production and consumption patterns are closely linked. According to the HIES (2010) 35.2% and 21.1% of the population in rural areas lives below upper and lower poverty line respectively . It also plays a fundamental role in the sustainable valorization and preservation of natural resources and in preserving and promoting the resilience to natural calamities and climate change of rural communities and agro ecological systems.
However, as Bangladesh develops, and other sectors grow (such as readymade garments), the share of agriculture in Gross Domestic Product (GDP) has naturally declined. During the fiscal year 2012-13, the broad agriculture sector contributed 16.77% to the total GDP. The contributions of crop, fishery, livestock and forestry subsectors in GDP were 9.49%, 3.68%, 1.84% and 1.76% respectively. The provisional estimates show that contribution of the broad agriculture sector to GDP in 2013-14 would be 16.33% (BER 2014) . Nearly three fifth of the agricultural GDP comes from the crop sub-sector; the other contributors in order of magnitude are fishery, livestock and forestry. Major agriculture (agro-processing) subsectors were presented at followings:
Fruit Processing Sector:
Fruit cultivation has been a traditional part of the agricultural practices in Bangladesh. The industry is adequately established to provide value added products, food security and income for its stakeholders. In Bangladesh most fruit production is seasonal and occurs during the month of Jaistha according to the Bengali calendar, also referred to as “Modhu Mash” (honey month). This period falls between May to June.
About 54 % of total fruits produced in the country are harvested and marketed in the months of Baishakh, Jaistha, Ashar and Srabon, that is, from April to August. Rest of the 46 % is harvested during the other 8 months. Among the most important fruits harvested during Modhu Mash are mango, jackfruit, litchi and pineapple. Papaya and banana are produced throughout the year.
Mango, guava, tomato, banana, and litchi are the main processed fruits. It is quite surprising that Bangladesh imports only 70% of its fruit pulp . Over the last decade, the fruit processing industry has been boosted by factors such as increased demand for convenient meals, health awareness and branding. However, there are some challenges as well e.g., more than 35% of the fruits and vegetables are wasted due to lack of processing and storage facilities.
A major contributor to the local fruit pulping, canning and juice industry of Bangladesh is mango – the most commonly processed fruit in Bangladesh. In fact, the country is ranked 9th in the global production of mangoes. In particular, mango pulping is profitable due to its longer shelf life and affordability. However, canned mango is relatively new in the local processing industry.
Food Processing Sector:
Bangladesh has a well-established food processing sector, which heavily relies on agricultural production. The sector accounts for 22% of total manufactured products, 20% of total labor forces and 5% of total GDP equal to around USD 4.48 billion . Main focus of this sector is on domestic demand. Export of processed food products is limited and mainly targeted ethnic products, not the mainstream international markets. Besides scrimps main products are agriculturally based as oils and bakeries, but also fishery plays an important role.
Major subsectors of Bangladeshi processed food are Edible oil, Fisheries, Bakery products, Grain milling, Tea and Soft Drinks, Sugar Molasses, Dairy products, Fruits and vegetables, and other food products etc. Edible oil is the largest subsector account for 39% of processed food sector followed by Fisheries, Bakery, Tea and Soft drink etc. Composition of Bangladeshi processed food sector is as follows:
Figure –1: Food Processing Sector in Bangladesh.
Source: Udenrigsministeriet, Ministry of Foreign Affairs of Denmark (Undated). Food Processing in Bangladesh.
There are nearly 700 processed food manufacturing enterprises in Bangladesh including brands like Teer, Olympia, Milk Vita, Fresh, and 7Up, Bombay, Ahmed, Bengal, Pran, Isphahani and Igloo. The processed food sector has grown 22% during the last 3 years and the growth is expected to continue as the industry is considered the most potential growth industry in Bangladesh.
From BAPA’s record, in 2011-12, the export was 86.91 mill US$ and in 2012-13 the same was USD 101.49 million. But in 2013-14 the export stood at nearly USD 153.50 million. At present 100 types of processed food products are exported to nearly 104 countries, which show competitive strength of our growing sector.
Major Countries for Exports : UAE, KSA, India, UK, USA, Bhutan, Malaysia, Kuwait, Singapore, Qatar, Somalia land, Nepal, Angola, Djibouti, Australia, Bahrain, Ghana, Senegal, Canada, Guinea Bissau, South Africa, Mauritania, Italy, Jordan, Belgium, Liberia, Maldives, Congo, China, Nigeria, Mayotte, Benin, Oman, Japan, Sierra Leone, Cyprus, Ivory Coast, Gambia, Burkina Faso, Sweden, Ecuador, Kenya, Loam Togo, Greece, Afghanistan, Lebanon, Korea, Germany, Iran, Cambodia, Sudan, Hong Kong, Spain, Mauritius etc.
Major Exported Products: Juice, Drinks, Puffed Rice, Snacks, Spices, Chanachur, Biscuits, Mustard Oil, Pickle, Frozen Vegetable, Semai, Potato Crackers, Nuts, Jam-jelly, Candy, Meat, Mango Bar, Molasses and Flattened Rice.
Manufacturing of Flour:
Flour is the second most important food staple in Bangladesh and accounts for around 12 percent of cereal food consumption. Wheat consumption generally continues to grow steadily, driven by demand from mid to higher income urban consumers. Bangladesh wheat millers are seeing growing opportunities to market branded quality packaged wheat flour, replacing coarse wheat “Atta” flour typically sold in loose bulk form. An emerging bakery and biscuit sector, as well a growing hotel, restaurant and institutional (HRI) sector, is also contributing to a growth in quality wheat consumption (now estimated at around 100,000 tons a year). Domestic wheat production has currently stabilized at around 1.25 million metric tons a year, but with an annual demand of flour exceeding 4 million tons, there is a supply-demand gap prevailing in the market .
There are several brands of flour in Bangladesh market. Teer (44%) is the most popular brand, followed by Fresh (22%) and ACI (18%). All other brands have less than 5% market share.
Bangladesh’s dairy consumption is growing, albeit from relatively low per capita levels (an estimated 44 milliliters of milk per day). When measured against the World Health Organization recommended minimum level of 250 milliliters a day, Bangladesh dairy consumption should increase five-fold. While local milk production has increased, from 1.78 million metric tons in 2001/02 to 3.46 million metric tons in 2011/12, domestic supplies are still lagging, and as a result Bangladesh is importing more dairy products.
In rural Bangladesh, almost two out of every three households rear cattle to produce milk for personal consumption. Surplus milk can be sold directly to neighbors or in the local market. The average dairy farm has 3.5 head of cattle, with very low average yields of 200-250 liters per 305-day lactation. Low herd yields generally reflect poor management practices and inadequate investment in genetics and veterinary services. In Bangladesh, dairy farming is generally considered to be a subsidiary profession, as male farmers are often more inclined toward field crop agriculture.
Traditionally, the Bangladesh dairy sector has been dominated by the Doodhwala and Ghosh communities consisting of small-scale intermediaries who collect fresh milk for processing into ghee, curds, sweets and other products. In the absence of refrigeration, fresh fluid milk typically represents a very small portion of the market.
Fresh milk processing and marketing in Bangladesh began in 1952, with the establishment of Eastern Milk Products Limited, a private company, which sold products under the trade name of Milk Vita. In 1965, the company’s ownership was transferred to the Eastern Milk Producers’ Cooperative Union Ltd. The first milk cooperative in what was then East Pakistan. After independence, the cooperative was renamed the Bangladesh Milk Producers Cooperative Union Limited (BMPCUL), and is best known today by its popular brand name, Milk Vita.
Milk Vita is Bangladesh’s largest dairy, and currently represents almost half of country’s total processed milk production. Members of the Milk Vita marketing cooperative deliver milk to collection points, where it is then transported to a chilling plant before processing. Milk Vita members receive technical training, livestock genetics, veterinary and extension services, and various other production inputs.
In 1998, BRAC, the Bangladesh based development organization, launched BRAC Dairy to assist its village organizations in dairy production and market development. BRAC offers microfinance loans for livestock and provides a range of market services, including transportation, pasteurization, processing, branding and distribution. Independent dealers typically purchase milk directly from approximately 40,000 farmers and transport it to one of BRAC Dairy’s 100 chilling stations, which are mostly located in the western divisions Khulna, Dhaka, Rajshahi, and Rangpur. As BRAC generally offers competitively higher prices, farmers consistently receive a fair market price. BRAC processes milk at a central facility in Gazipur, which produces a range of products under the Aarong brand name. BRAC (Aarong) products include fresh and powdered milk, flavored milk, flavored yoghurt and sour curd. BRAC is the second largest dairy operation in Bangladesh, representing about 20 percent of the countries processed milk output.
In 2002, the Program for Rural Advancement Nationally (PRAN), one of the largest agro-processing firms in Bangladesh, partnered with Land O Lakes, Tetra Pak, and the U.S. Department of Agriculture (USDA), to introduce ultra-high temperature (UHT) treated milk into the Bangladesh School Nutrition Program. The technical expertise developed during this project was also shared with other companies to expand local commercial production of UHT milk. Today, PRAN is the third largest dairy operation in Bangladesh, representing about 10 percent of the market.
Salt industry plays a very important role in the development of the economy of Bangladesh in terms of output, employment generation and industrialization. Salt is perhaps the only industrial mineral that is used by virtually every human being. It can also be found in every country and is produced commercially in some 120 countries of the world. Salt industry is the largest labor oriented cottage industry in Bangladesh. The growth of this sector is closely related with industrial development of the country.
The attainment of self-sufficiency in salt saves a huge amount of foreign currency which would be required for importing salt. This sector also generates large number of employment. About 5 million people are directly or indirectly engaged in this sector. Also about 25 million people’s socio-economic life style mostly depends upon these 5 million people. This sector contributes about Tk.300 to Tk.350 cores each year in national economy that stands for Tk.1200 to Tk.1500 cores will be processed. Therefore, the importance of the crude salt production and the salt producers needs no further exaggeration .
The salt industry in Bangladesh can be divided into two categories, namely the salt mill and saltpan. The salt mill, which refines crude salt, is considered a mobile industry, since their location is dependent on the decisions made by the salt mill owner.
On the contrary, the saltpans, which are found only on the beaches of Cox’s Bazar, can be considered an immobile industry because their location is dependent on the availability of seawater. Small-scale industry in the rural areas of Bangladesh plays a very important role in the development of the rural economy.
In Bangladesh salt is produced from sea water by solar and lixiviation process in the coastal areas of the districts of Chittagong, Cox’s bazaar, Noakhali, Barishal and Khulna and the adjoining off-shore islands. Lixiviation processes are being practiced in Noakhali, Barishal and Khulna districts. But the units in Cox’s bazaar account for the manufacture of about 95% of the total production of the country. This profile is prepared on the basis of the solar process.
Salt farming is overwhelmingly concentrated in Cox’s Bazar district where 15% of total rural households of the district are salt farmers. They meet bulk of the demand for raw salt in the country. As of June 2003, 38,328 salt farmers operated on 23,735 ha of land in Cox’s Bazar.
Top 11 Agro Processing Sectors in Bangladesh; this is the summary of two chapters from the book “Most Prospective Sectors to Invest in Bangladesh” of the Author. To purchase the book click here.
Sea Food Processing:
Bangladesh is the largest Delta in the world having hundreds of rivers, rivulets and tributaries. In terms of area and varieties of fish species, the inland water resources of the country are considered as one of the richest in the world. In 2008, Department of Fisheries (DoF) declared that there are 260 species of freshwater fish, 475 species of marine fish, 24 inland water prawn species, 36 species of marine shrimp and 12 species of exotic fishes available in Bangladesh. Around 60% of the total national demand for animal protein of the country is contributed by the fisheries industry and the sector is also one of the major export earning segments.
Bangladesh earned about BDT 40,970 million by exporting frozen fish, shrimps and prawns in FY14 which was about 2.3% of the country’s total export (without considering the proceeds from EPZ). Its share in the Gross Domestic Product (GDP) and value of the agricultural sector amounted to be 4.37% and 23.37% respectively in FY13. Following several macroeconomic hurdles, the industry lost its second position in export and stood seventh (export amount- USD 568.0 million; 1.82% of country’s total export) in FY15.
According to the declaration made by Bangladesh Frozen Food Exporters Association (BFFEA), the country has 14.7 million shrimp and fish farmers along with 1.3 million fishermen. The export portion of the sector directly provides a livelihood to nearly 1.2 million people, while about 4.8 million people indirectly depend upon this sector .
Frozen fish has traditionally been the most important export product; however, exports of fresh fish have been increasing rapidly and now represent a significant portion of export revenue. Currently, only a small portion is exported as fillets. For frozen fish the most important markets are the UK, Saudi Arabia, the US and to some extent Italy and China. For fresh fish the most important markets are India, China, Germany and Oman.
According to the estimation of exporters and sector representatives, the exported categories are shrimps and prawns (75%), frozen whole fish (10%), fresh fish (8%), fish fillets (5%) and fish slices (2%). The export oriented fisheries industry is divided in two broad subsectors: Shrimps and prawns (exported as frozen) and White fish (exported as both frozen and fresh).
Lack of raw material supply, Lack of skilled labor force and value, Dominant position of traders and commission agents, Bad quality image and international buyer requirements, High percentage of post-harvest losses, Inadequate Government support and control and Inefficiencies in the supply chain etc. are the major challenges of this sector.
Jute is known as the Golden Fiber of Bangladesh. The Jat Area, popular for highest quality of jute fiber is located in Bangladesh. Therefore, Bangladesh is able to supply the highest quality of jute fiber in the world.
However, Bangladesh falls behind its other competitors in applying recent technological advancements. In terms of world export of jute fiber, Bangladesh’s share is more than 70%, which makes Bangladesh the largest exporter of jute fiber in the world .
Jute is grown mainly in Bangladesh for fiber rather than for seed. In Jute, use of quality seeds of improved variety alone contributes 223.54 kg of extra fiber per hectare i.e. an increase of about 17% (Talukder and Rahman, 1989). It is one of the cheapest and the strongest of all natural fibers and considered as fiber of the future. Jute is second only to cotton in world’s production of textile fibers. India, Bangladesh, China and Thailand are the leading producers of Jute.
There are almost 3 million farming households are involved in jute cultivation. Jute harvesting takes place at a time when marginal farmers and farm workers are faced with shortage of their food stocks. The cash derived from sales of jute fiber and the wages received by workers are an important contribution to food security for this vulnerable segment of the population.
Rapid employment generation is vital to poverty reduction in Bangladesh. Economic growth driven by sectors that are labor-intensive by nature has greater potential for job creation. The fact that the jute sector is so labor-intensive has played important strength, given the country’s large rural underemployment (Abdullah, 2013).
The global demand for jute and allied products has seen a steady increase driven by a fresh comeback for biodegradable fiber as people now look for ecofriendly products replacing synthetics. Bangladesh produces around 30% of the total world production of jute and exports around 40% of its total produce as raw jute. Thus, it is necessary to estimate the behaviors of jute production and forecast the future production of jute in Bangladesh. The main purpose of this paper is to identify the Auto-Regressive Integrated Moving Average (ARIMA) model that could be used to forecast the jute production in Bangladesh.
There are two types of jute mills in Bangladesh. 19 conventional/traditional jute mills are running under Bangladesh Jute Mills Corporation (BJMC) producing Hessian, CBC and sack and 42 conventional jute mills are under the Bangladesh Jute Mills Association (BJMA) in the private management. Out of these mills only seven to ten mills running well, five to seven are limping and the rest being closed. The reason is because of original entrepreneurs are burdened with heavy bad debts and banks are unable to finance them due to overdrawn position.
After closing down the largest jute mill in Asia, Adamjee Jute Mills at Narayanganj, the government handed over some of its good condition machineries to mills under Bangladesh Jute Mills Corporation (BJMC) and sold rest of almost useless machineries to the private entrepreneurs by which they set up having a capacity of 20-50 looms. Now, there are such 30 mills, producing traditional jute goods, they are also under Bangladesh Jute Mill Association (BJMA).
There are 50 private jute spinning mills producing jute yarn/twine under Bangladesh Jute Spinners Association (BJSA). The mills under jute spinning sector produce 0.29 million (2.90 lakh) tons of jute yarn/twine and export 0.261 million (2.61 lakh) m. tons of quality yarn/twine consuming 1.9 million (19 lakh) bales of high quality raw jute and earn foreign exchange worth Taka 12 million (1200 crore) per annum. Jute sector of Bangladesh is producing thousands of jute products under following sub-sectors:
- Bags for various purpose
- Office Accessories
- Carpet/Floor mat
- Household products
- Home textiles
- Decoration Item
- Various shoes
- Yarn & Fabric
- Paper & pulp
- Fashion Accessories
Production of Silk Textile:
Silk production in Bangladesh remained an unrealized potential to the end of the last century. Production declined dramatically over 1995 due to further decrease of tariff on imported silk, followed by devastating floods in 1998, while the sericulture industry in Bangladesh largely become a stagnant. Private organizations continued producing silk merchandise, but largely depending on more reliable imported silk. In 1998, the government put into the Silk Development Project (SDP), within which Bangladesh Silk Foundation (BSF) was created to revive the silk sub-sector once again into a forward-looking industry.
Silk is made of proteins secreted in the fluid state by a caterpillar, which is known as ‘silkworm’. During its 3 to 8 day pupating period, the silkworm secretes fibroin, a sticky liquid protein, from its two sorceries (special salivary glands). Pushed through a spinneret (opening on the mouth), the twin pair of continuous threads harden when they come into contact with the air. Next, the silkworm secretes sericin, a bonding agent, from two other glands to hold the two filaments together.
Experts said the silk mills should increase the number of sales center and production, the advertising and other promotional expenditure to increase the market share and to retain the leading position in the market. The product line of the industry may remain same, but some old design may be changed, and attractable design would be introduced.
Saris and other products made out of silk are coveted by users in the country and abroad. Silk product is available as fabric in colors and patterns for designers. Silk fabric is also available in ranges for apparel and for other purposes.
There are some showrooms of famous silk products in the capital, including Rajshahi silk, Kori Silk and Doail Silk. Silk products are in demand, but customers in many cases cannot afford to purchase such products due to high price.
There were 75 silk-producing units in Rajshahi’s BSCIC area, but only 14 are still in operation and only two or three out of them are involved in fabric production . Some privately owned factories are also closing down due to continuous loss. As a result, many old factory owners are also winding up their factories. According to a report prepared by the Friedrich-Neumann-Stiftung für die Freiheit (FNF), Bangladesh imports 486 tons of silk, mostly from China, every year, while local production of silk amounts to 24 metric tons against the demand of 510 tons.
Bangladesh has a history of 170 years of tea plantation. Tea was first grown in Bangladesh in Kodalaya of Chittagong in 1828. Malnicherra in Sylhet was the first planned tea garden in the country under the ownership of Sylhet tea Company, between 1856 – 1860. Tea plantation laborers were recruited from Bihar, Orissa, Madras, Uttar Pradesh, Madhya Pradesh, Bakra and also Nepal.
Currently there are 169 tea gardens in the country. Production during 2015 was 66.35 million kg. The total area allocated for tea is 115707.89 HA, the area utilized for tea production is 59609.43 HA, the total number of laborers is 122840, the number of staff is 2891, and there are 458 Officers. The national yield is 1270 kg per HA . Although production of tea is primarily dominated by Sylhet and Chittagong, in recent decades tea plantation has spread to the Chittagong Hill Tracts and in Panchagar, Thakurgaon in North Bengal. Plans of growing tea at the state level in Mymensingh, Comilla, Gazipore, Jamalpur, Netrakona and Cox’s Bazar are also in the offing. Bangladesh produces CTC tea only.
About 87% percent of the domestic market is controlled by the blenders while loose tea traders account for the rest of the market. Today almost all tea consumed domestically is in branded form. There are several nationwide brands and hundreds of localized brands competing for this growing market. Some of the major blenders are the M.M. Ispahani Ltd.,
Abul Khair Consumers Product Ltd., Meghna Tea Co. Ltd., Unilever (BD) Ltd., M. Ahmed Tea & Lands Co. Ltd., HRC Products Ltd., Danish Foods Ltd., Tetley ACI(BD) Ltd., and Shaw Wallace (BD) Ltd. Etc.
The parent body of all Blenders, loose tea traders, Tea Brokers and Warehouses is the Tea Traders Association of Bangladesh (TTAB). It was formed in 1958. It protects and promotes interest of the trade as a whole. The association is a member of the Federation of the Bangladesh Chamber of Commerce and Industry, the apex body of Trade and Industry.
Under the TTAB auctions are being held, 45 auctions in a tea season which begins at the end of April and continues till Mid-March of the following year. The total number of member of the TTAB stands at 251 which include warehouses, buyers, brokers and 4 seller members. More than 100 buyers are regular and active in the auction.
In the year 1980 production was 40 million kg, export 30.9 million kg, with the balance consumed in the domestic market. In 1990 production was 45.8 million kg, export 26.9 million kg, 18.9 million kg was consumed in the internal market. In 2000 production was 52.64 million kg, export 18.1 million kg, and internal consumption was 34.54 million kg. In 2010 production was 59.16 million kg, export 0.91 million kg; 58.25 million kg were consumed internally.
Domestic consumption increased due to rapid urbanization, improved living standards, better distribution as a result of improved road communications, better marketing and promotional techniques and ensuring a high level of consistency and quality of the product. With the onset of a free market economy, all sorts of controls by the Tea Board were withdrawn, a level playing field was created, blenders were more active with their brands, and the competition thus created gave an initial boost to domestic consumption.
Huge capital was invested by the organized local private blenders and multinationals as well as improving the overall infrastructure from production (procurement to blending & packaging) to marketing. Sluggish growth transformed to rapid and sustainable growth.
With the improvement of the rural economic environment, steady population growth as well as the emergence of an economically viable middle class, domestic consumption crossed 80 million kg in 2015. Production fell short and the surplus had to be imported.
The import of tea began in the year 2012 when 10.60 million kg were imported, 16.23 million kg were imported in 2013, and 6.91 million kg in 2014, and in 2015, 9.9 million kg have been imported to meet the growing domestic demand.
Production was falling short of demand since 2007 and by 2010 demand outstripped production. Production currently is increasing at the rate of 3% to 4% per year while consumption at 6.5%. Presently the country’s estimated total consumption is close to 83 million kg whereas total crop in 2016 has been estimated to be somewhere around 70 to 72 million kg.
Apiculture / Beekeeping:
Beekeeping / apiculture is considered as a low cost but prospective profession in rural Bangladesh. Bangladesh produced about 3 thousand tons of honey worth Tk 900 million in 2014-15 fiscal years . Increasing numbers of modern honey farms are also helping boost production in recent times. Setting up of processing plants and establishing an effective marketing chain can help the country export a large amount of honey in future.
The honey farmers, known as honey collectors, from Jessore, Sathkhira, Bagerhat, Gopalganj, Faridpur, Pabna and Kishoreganj are now hovering from field to field of mustard oil to collect honey. Nearly 1 thousand farmers in the country are now busy in honey collecting. Besides these other parts of the country, especially in greater Tangail, Munshiganj and Gazipur areas, honey collection or apiculture has emerged as a profitable business.
Rice Bran Oil:
Historically, edible oils have been an essential component of the human diet. Bangladesh consumes about 1.3 million tons of edible oil a year, which are mostly imported by private refiners. At present, the country spends over BDT 100 billion a year to import 1.4-1.5 million tons of edible oil against the domestic demand of 1.8 million tons, according to Bangladesh Bank and industry estimates.
The introduction of the rice bran oil is a testament to growing health consciousness amongst the consumers despite having various sorts of edible oil already in the market like palm oil, soya bean oil, mustard oil, sunflower oil and olive oil. It is suitable for high-temperature cooking methods such as stir frying and deep-frying. In Bangladesh, demand for rich rice bran oil is growing relentlessly fueled by increased health consciousness among the people. This 100% cholesterol free edible oil aspires to capture the health-conscious segment of the population.
According to the domestic rice bran oil-producing companies, In Bangladesh, 90,000 to 100,000 tons of rice bran oil is produced per year . Whereas, Demand for soybean oil and palm oil now stands at 1.4 million Tons. Currently, rice bran oil contributes 2.25%-2.5% of the total edible oil consumption.
However, the demand for rice bran oil is growing at a rate of 5 to 10% per year. Reduction in the prices of rice bran oil is also increasing its popularity. The price of each liter of rice bran oil was BDT 40 higher than soybean oil during the initial days but the gap has now come down to around BDT 20 each liter.
Rice bran oil is extracted from the germ and inner husk of rice. The country produces more than 50 million tons of paddies a year, which yields 4 million tons of rice bran. However, half of those rice brans are exported to India.
The daily requirement for local oil producers is 1,050 to 1,000 tons of rice bran. Now, there are around eight firms currently producing rice bran oil in Bangladesh, including Bangladesh Edible Oil Ltd, EOIL, Rashid Oil Mills and ACI. Existing players are also expanding their capacity to cater to the increased demand. So far, Bangladeshi manufacturers have invested approximately BDT 5 billion in this sector.
Top 11 Agro Processing Sectors in Bangladesh; this is the summary of two chapters from the book “Most Prospective Sectors to Invest in Bangladesh” of the Author. To purchase the book, click here.
*Author’s Short Profile:
Mr. Md. Joynal Abdin is a Business Consultant & Digital Marketer based in Dhaka, Bangladesh. He is also Co-Founder & CEO of Bangladesh Trade Center. Previously he served at Dhaka Chamber of Commerce & Industry (DCCI) as Executive Secretary; DCCI Business Institute (DBI) as Executive Director; SME Foundation as Deputy Manager; and the Federation of Bangladesh Chambers of Commerce & Industry (FBCCI) as Assistant Secretary.
The list of services Mr. Abdin is offering includes but not limited to Business Research and Documentations like Feasibility Study, Project Proposal Preparation, Writing Business Manual, Standard Operating Procedures etc.; Export Market Selection and Product Positioning at Home and Abroad; Buyers-Sellers Matchmaking; Website Development; Search Engine Optimization (SEO); and Social Media Marketing etc.
Top 11 Agro Processing Sectors in Bangladesh; this is the summary of two chapters from the book “Most Prospective Sectors to Invest in Bangladesh” of the Author. To purchase the book, click here.