Strategic Management
MGT490
Section 04
Assignment: Industrial Analysis on Cooking Oil
Submitted To: Mr. Md. Latiful Kabir
Submitted by: Group 05
Name
ID
Contribution
Romala Munna
1710070
Industrial Analysis Part Two
& Compilation
Fawzia Abida
1830090
Industrial Analysis Part One
Md. Namzul Hasan
2022011
Key Challenges
Shakia Afrin Nowshin
1730581
Company Overview &
Conclusion
Asif Hossen
1930549
Submitted: April 2nd, 2023
Industry Players’ Steps
Mgt490 Group 05 Industrial Analysis of Cooking Oil
Letter of Transmittal
April 2nd, 2023
To
Md. Latiful Kabir
Lecturer, Department of General Management,
School of Business Independent University, Bangladesh
Subject: Letter of transmittal for the submission of Industry Analysis of Cooking Oil
Sir,
We, the undersigned, would like to submit our report on the industrial analysis of the cooking oil
industry. The report concentrates on the Industry size and its Growth Trends, the Maturity of the
industry, key segments, Segments that contribute to Revenue, External economic factors and
their Effect on the industry, seasonality, Technological Factors, Regulatory, Political and Legal
Concerns, Competitive Environment and Changes in the Competitive Environment and Key
Challenges Facing the Industry.
We tried our best to learn as much as possible about the industry of cooking oil. We would be
glad if the report be accepted and acknowledged by you. And we, as a group, are here to clarify
any matter whenever you require so in relation to the report.
Sincerely yours,
Group 05
Mgt490 Sec 04
Independent University, Bangladesh
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Acknowledgement
We express our heartiest gratitude to our faculty, Mr. Md Latiful Kabir for educating us on
various aspects of analyzing an industry and its management, as well as guiding us through the
report writing procedure.
We also would like to thank each other for building good team skills and for contributing to the
report equally. Without each other's help and support this report wouldn't have been possible.
Our honest gratitude goes to those involved in the cooking industry that aided us with external
information regarding the industry that aided us to write our report in detail.
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Table of Contents
Overview of the Industry
Industry Analysis
Part One
Industry Size and Growth Trends
Maturity of the Industry
External Economic Factors
Seasonality of the industry
Part Two
Technological Factors
Regulatory, Political, and Legal Concerns
Competitive Environment and Changes in the Competitive Environment
Porter’s Five Forces
Key challenges facing the industry
Industry Players’ Steps to Meet Three Key Challenges
Conclusion
References
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10
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Overview of the Industry
Domestic Soybean oil market
The demand for edible oil in the domestic market is influenced by several factors. Edible oil like
soybean is a crucial part of the local cuisine, over that, change in the income band, rural to urban
migration, awareness towards health-conscious lifestyle, and socio-economic conditions also
play a vital role in shaping the demand for the edible oil. As per industry estimates, there are at
present 86 registered edible oil refineries with an annual refining capacity of 3.5MT, with the
market being dominated by the top 9 major players which cumulatively account for 75% of the
refining capacity which is 2.6 MT. The major players operate at an average capacity utilization of
50% with larger participants operating at a capacity of 65-70%.
Palm Oil
Since 2003, palm oil has dominated the global market for edible oils. Among the three main
edible oils, palm oil had a market share of roughly 64% in 2012. Both raw and processed palm
oil are imported. For the purpose of marketing the refined products, local refineries process crude
palm oil (CPO) and crude palm olein (CPL). The food processing industry and vanaspati
producers use imported refined palm oil and refined palm olein. Its import and consumption
volume has now surpassed one million tons, and in the near future, it is expected to increase to
1.5 million tons.
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Palm oil includes crude palm oil, crude palm olein, refined palm oil, and refined palm olein;
Soybean oil includes crude degummed soybean oil, and crude soybean oil obtained locally from
imported Soybean; Canola/ Mustard oil is the oil obtained locally from imported canola/mustard
seed. The two main suppliers of palm oil for the Bangladeshi market are Malaysia and Indonesia.
The total amount of palm oil imported between January and August 2013 was 875,809 tons, of
which 357,228 tones, or roughly 41%, were Malaysian palm oil (MPO), and 518,581 tons, or
roughly 59 percent, were Indonesian palm oil. When compared to the January–August period of
2012, the volume of Malaysian palm oil imported increased by 95.62 percent in 2013. This rise
in Malaysian palm oil imports in 2013 can be attributed to MPO suppliers' active participation in
the Bangladesh market as well as some Singapore-based trading companies' switching of supply
sources from Indonesia to Malaysia.
Edible Oils – Bangladesh
● Revenue in the Edible Oils segment amounts to US$1.39bn in 2023. The market is
expected to grow annually by 11.47% (CAGR 2023-2027).
● Revenue in the Edible Oils segment amounts to US$1.39bn in 2023. The market is
expected to grow annually by 11.47% (CAGR 2023-2027).
● In relation to total population figures, per person revenues of US$8.21 are generated in
2023.
● In the Edible Oils segment, volume is expected to amount to 322.90m kg by 2027. The
Edible Oils segment is expected to show a volume growth of 6.9% in 2024
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● The average volume per person in the Edible Oils segment is expected to amount to
1.53kg in 2023.
Bangladesh uses soybean oil most frequently for cooking, with annual per-capita oil
consumption reaching 9.2 kg. According to MGI's internal study, Bangladesh's per capita
consumption is substantially lower than the global average (9.9 Kg), whereas the EU has the
greatest per capita consumption (61 Kg) (25.2 Kg).
The demand for edible oil is expected to rise over the next ten years, with developing nations'
need expected to overtake that of developed nations. Special emphasis has been placed on the
economies of Bangladesh, China, and India, where edible oil is a fundamental good with rising
demand.
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The US will continue to be the world's top producer of oilseeds, followed by Brazil, China,
Argentina, India, etc., according to a new FAO research, with the worldwide oilseed production
predicted to increase by roughly 23% by 2020. Within 505 million metric tons is the estimated
range for total output (M MT). Within 2020, the production of vegetable oil is expected to
increase by almost 30%, reaching 186 MMT. Together, Malaysia and Indonesia will supply 45%
of the raw materials, with China, Argentina, and Brazil providing the majority of the remaining
supply. Bangladesh mostly imports raw materials from Indonesia, Malaysia, and Brazil. A look
into import level indicates a fall in 2008, followed by increasing import in the following years.
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Industry Analysis
Part One
Industry Size and Growth Trends
The cooking oil industry is an important part of the food and beverage sector in Bangladesh. It is
a mature and highly competitive industry that has experienced steady growth in recent years.
According to a report by Research and Markets, the cooking oil market in Bangladesh was
valued at USD 1.14 billion in 2019 and is expected to reach USD 1.60 billion by 2025, growing
at a CAGR of 5.8% during the forecast period of 2020-2025.
Factors that have shaped the trend in the last few years or decades:
● Growing population and urbanization: Bangladesh has a rapidly growing population,
which is driving the demand for cooking oil. Additionally, with the increasing
urbanization, more people are shifting towards a modern lifestyle and dietary habits,
which is further contributing to the demand for cooking oil.
● Health awareness: There has been a growing awareness among consumers about the
health benefits of using cooking oils that are low in cholesterol, trans fat, and saturated
fat. This has led to a shift towards healthier cooking oils such as olive oil, canola oil, and
sunflower oil.
● Government policies: The government of Bangladesh has implemented several policies
to encourage the use of locally produced cooking oils. For example, in 2016, the
government introduced a 5% import duty on refined palm oil to promote local
production.
● Increased competition: The cooking oil industry in Bangladesh is highly competitive,
with both local and international players vying for market share. This has led to increased
innovation, product diversification, and aggressive marketing strategies by companies.
● Price volatility: Cooking oil prices in Bangladesh are subject to frequent fluctuations due
to factors such as global supply and demand, weather conditions, and government
policies. This has resulted in challenges for both producers and consumers, with
producers struggling to maintain profitability and consumers facing affordability issues.
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Maturity of the Industry
The cooking oil industry in Bangladesh can be considered to be in a mature stage of its lifecycle.
The industry has been in existence for several decades, and there are numerous established
players that dominate the market.
The market for cooking oil in Bangladesh is highly competitive, with both local and international
brands competing for market share. The competition is intense, and companies are constantly
innovating to gain a competitive edge. The market is also highly fragmented, with a large
number of small and medium-sized players operating in the industry.
The demand for cooking oil in Bangladesh is relatively stable, with a significant portion of the
population using it for daily cooking. The market is largely driven by population growth,
urbanization, and changing dietary habits. With a growing middle class and increasing
disposable income, the demand for premium cooking oils is also on the rise.
While the cooking oil industry in Bangladesh is mature, there is still room for growth and
innovation. Companies will need to focus on product differentiation, branding, and marketing
strategies to maintain their market share and stay ahead of the competition. Additionally, there is
an opportunity to tap into the growing demand for healthier cooking oils, such as olive oil or
avocado oil, by educating consumers on their benefits and promoting their usage.
External Economic Factors
● Agricultural production: Bangladesh is predominantly an agricultural country, and the
performance of the agriculture sector has a significant impact on the cooking oil industry.
Changes in weather conditions, natural disasters, and government policies affecting the
agricultural sector can impact the production of key crops used in cooking oil
manufacturing, such as soybean, sunflower, and rapeseed. Any reduction in the
availability of these raw materials will increase the cost of production and may affect the
prices of cooking oil in the market.
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● International prices of cooking oil: Bangladesh imports a significant portion of its
cooking oil, with the primary source being neighboring countries such as India and
Malaysia. International prices of cooking oil can be affected by factors such as changes in
demand, supply disruptions, and geopolitical tensions. Any significant increase in
international prices of cooking oil will increase the cost of imports, leading to a rise in
domestic prices of cooking oil.
● Exchange rates: The exchange rate of the Bangladeshi Taka against other currencies can
also affect the cooking oil industry. As the industry relies on imports for a significant
portion of its raw materials, any depreciation of the Taka against the currencies of the
countries from which it imports can increase the cost of raw materials, leading to an
increase in the prices of cooking oil in the market.
● Government regulations: The Bangladeshi government regulates the import and export
of cooking oil and sets policies related to the pricing of the commodity. Any changes in
government regulations or policies can affect the industry, and industry players need to
keep themselves updated with the latest developments to stay competitive.
● Consumer behavior: Changes in consumer preferences and behavior can also affect the
cooking oil industry. For example, increasing health consciousness among consumers
may lead to a shift towards healthier cooking oils such as olive oil and canola oil,
affecting the sales of traditional cooking oils such as soybean oil and sunflower oil.
The cooking oil industry in Bangladesh is subject to a range of external economic factors that
can impact its profitability and competitiveness. Industry players need to closely monitor these
factors and adapt their strategies to stay competitive in the market.
Seasonality of the Industry
In Bangladesh, the consumption of cooking oil is relatively stable throughout the year with no
significant seasonality patterns. However, there may be some slight fluctuations in demand for
different types of cooking oil based on cultural and religious festivals.
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For example, during the month of Ramadan, which is a holy month for Muslims, there may be a
higher demand for edible oil as families prepare and consume traditional foods for iftar (the
evening meal that breaks the fast during Ramadan). Similarly, during the festival of Eid-ul-Fitr,
which marks the end of Ramadan, there may be a higher demand for cooking oil as families
prepare and share festive meals.
Additionally, there may be some regional variations in the consumption of cooking oil based on
the availability of different types of oils and local cuisine preferences. For example, in coastal
areas, people may consume more fish and seafood, which may require more use of mustard oil
for cooking. In contrast, in other parts of the country, people may prefer soybean oil or palm oil
for cooking.
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Part Two
Technological Factors
Cooking oil was discovered as early as 2000 BC, with soybean oil discovered by the Chinese and
Japanese. In southern European countries olive oil was produced by 3000 BC. whereas, in
Northern American States and Mexico, sunflower and peanut oil was made by beating up roasted
seeds and nuts respectively into a paste and boiled in water. By this the oil would rise to the top
and then be skimmed off. And in Africa palm kernels and coconut white meat were boiled into
pulp and skimmed off from the water separating the oil. (Cooking Oil, n.d.)
Technological changes occurred initially among China, Greece, Rome and Egypt with the use of
a stone mortar and pestle, or by feet to increase the surface area of oil extraction from the raw
materials.
This developed into the use of pressing the raw materials using levers and wedge presses. And
further to introduce edge runners to grind and a screw to operate a lever press.
The increase in technology allowed more oils to be discovered and extracted, for example, corn
oil in the 1960's, cotton oil, grapeseed oil, etc. A stamper press was invented in Holland in the
1600’s used till the 1800’s.The first patent of oil extraction was obtained by Deiss of England. In
1876, V. D. Anderson invented the first improved cage press that would result in the oil draining
out of the slots through the side. (Cooking Oil, n.d.)
With the use of developed technology, oil is now obtained in three different ways:
● Physical Hot Oil Pressing: this process uses external forces to press the oil. And
includes the selection of the seed, screening of the seed, then destoning and squeezing to
separate the oil. This method gives a high quality, light colored and pure flavor with no
chemical residue, which provides safety, no pollution and sanitation (Vegetable Oil
Making Technology Class, n.d.)
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● Cold Oil Pressing: this is an upgraded version of the hot oil pressed method.
Reason being, when first introduced it was determined that oil extracted under
low temperatures preserve better the nutrients of the raw materials than hot oil
pressed oils. This method is best for high-end oil plants, those that contain high
amounts of unsaturated fatty acids. Cold pressed oil controls the amount of steam
and temperature to ensure a temperature below 60℃, to keep the active materials
in the oil more nutritious and healthy. (Vegetable Oil Making Technology Class,
n.d.)
Regulatory, Political, and Legal Concerns
Most people tend to think that it is the producers that determine the pricing of booking oils in the
industry, but in fact there is no policy or regulation to control the production or import cost of
edible oils. This is where the government intervened, to control and reduce the price of loose oil
trading in the long run. Through The Essential Commodities Marketing and Distributor
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Appointment Order 2011, marketing and distribution systems were aimed to reduce prices and
prevent influences from middlemen.
The prices are fixed by the national committee. And changes in the legality within the industry
are discussed below:
● Importers or manufacturers must appoint agents in the Upazila, City and District level.
Ans must sign an agreement to inform the government regarding the appointment.
● Prices can be fixed by refiners only if a proposal of price change is submitted to the
government 15 days prior to the price coming into effect
● The cooking oil must be packaged in the form of drums or jars, with information
regarding prices and production.
● Residual used cooking oil as per the Food Safety Hygiene Regulation 2018, in section
7(a)
(Policy on Disposal of Used Cooking Oils Underscored, 2021)
Competitive Environment and Changes in the Competitive Environment
The nature of the cooking oil industry is complex as the changes in the economic environment
affect the production and distribution of oil to consumers worldwide. The Five Forces discussed
below analyzes the influence faced in the competitive environment in more detail. Laws relating
to cooking oil production influence the entrance of a new company within the industry. Thus,
companies now must have an adequate amount of capital to finance the regulatory expenses
including, production and marketing costs.
(Equatorial Palm Oil Plc PESTEL / PEST & Environment Analysis[Strategy], n.d.)
Cooking oil is distributed into the following segments
● Application:
○ Bakery and Confectionery
○ Snack Foods
○ Salads
○ Cooking Oils
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● Geography:
○ North America
○ Europe
○ Asia-Pacific
○ South America
○ Middle East
○ Africa
● Type:
○ Palm Oil
○ Rapeseed Oil
○ Sunflower Oil
○ Peanut Oil
○ and Other Types
The key drivers that brought about changes in the competitive environment include:
● Population and Urbanization: increasing population determines that the demand of
cooking oil also increases. Correct for developing countries where demand for processed
food increased, which requires cooking oil in production. Thus, increasing
competitiveness for the demand of cooking oil
● Increasing Income: an increase in incomes leads to an increase in food consumption,
including processed food. It also increases the demand for high-quality oils, for example,
olive oil.
(Cooking Oil Market SWOT Analysis, Growth, Share, Size and Demand Outlook by 2031 |
Archer-Daniels-Midland Company, American Vegetable Oil, Bunge Limited, 2022)
Porter’s Five Forces
● Bargaining Power of Suppliers: for the cooking oil industry the bargaining power of
suppliers is relatively low, reason being that suppliers are high in numbers and are more
globalized. Due to this, there are less threats from other suppliers.
● Bargaining Power of Buyers: buyers in the cooking oil industry have high bargaining
power as buyers demand healthy cooking oil providing protection from heart diseases and
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obesity. Thus, increasing the pressure for providers to provide the best in the most
cost-effective way, giving the buyers the opportunity to buy oil best to their preference.
● Threats of New Entrants: new entrants are considered to be moderately threatening as
new companies entering the industry are adopting different innovations to ensure
nutritional benefits.
● Threats of Substitutes: Substitutional threats are relatively low, with the use of butter
and clarified butter available as substitutes for cooking oil, especially because there are
numerous different types of oils available in different regions of the world for cooking.
● Competitive Rivalry: competition in the cooking oil industry is intense and has the
availability of different companies competing for market share, where Asia and Europe
with has the highest cooking oil market size, due to their traditional cuisines. For
example, Bangladesh’s top five mustard oil companies include: Partex Star Group,
Bangladesh Edible Oil Ltd., Pran Foods Ltd., Wilmar International, City Group.
(Bangladesh Mustard Oil Market Size & Share Analysis - Industry Research Report Growth Trends, n.d.)
(Cooking Oil Market Size & Trends 2028 | Potential Growth, n.d.)
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Key Challenges Faced in the Industry
Bangladesh is one of the prosperous nations in Asia, Bangladesh is projected to have the
26th-largest economy in the world by 2030. Regularly consumed goods like protein and edible
oil saw an increase as more individuals could afford better quality meals. According to the HIES
2016 statistics, the average annual protein consumption per person was predicted to reach 37 kg
by 2020 and to increase at a CAGR of 2.07 percent over the following five years. The
consumption of main edible oils is now at 2.7 million tons in the edible oil sector, and it is
anticipated to reach 3.65 million tons by 2025.
● Demand side factor: Both accessibility and cost Our findings reveal that both bulk and
bottled oil products were extensively accessible in all of the locations where we
performed research, as discovered by GAIN and icddr'b (2017). Between 3 and 35 BDT
separated the least expensive bottled oil option from the least expensive bulk oil option
across all research locations. Because of the price differential, low-income and some
middle-income consumers in Rangpur and Muhammadpur stated that they preferred bulk
oil over bottled oil. Consumers with higher incomes tend to purchase more bottled oil.
According to FGDs conducted in Chittagong, all low-income customers bought bulk oil
whereas all middle-class consumers bought bottled oil.
● Supply side factor: Value generation, capture and distribution While we were unable to
get precise pricing information from businesses, we approximated earnings from selling
bulk or bottled oils for refineries based on conversations with chemists employed in the
edible oil sector. These estimates are shown below. A refinery might generate 34-38%
more profit per liter of bottled oil and 57-75% more profit per liter of bulk oil if the oil is
not fortified, assuming that refineries properly fortify both bottled and bulk oils and that
premix from BASF costs BDT 15,000 per kg. Figure 3 challenges the notion that
producers' fortification costs are insignificant and emphasizes the substantially larger
advantages of under-fortifying bulk oil, even though these numbers should be interpreted
with caution.
● Persistent demand for under-fortified food: Our results indicate that even middle-class
customers with greater purchasing power frequently pick bulk oil, suggesting that the
additional advantages of bottled, or fortified, oil do not consistently justify the increased
price. Consumers are unaware of food items' fortification status. Consumer understanding
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of the nutritional advantages of fortified foods is consequently poor. Producers have little
motivation to provide adequately fortified products, and other market participants have
less reason to care about the fortification level of the goods they distribute and sell. There
is no motivation to increase information exchange or find another way to address this
problem within the value chain because customers do not take fortification status into
account when making purchase selections.
● Reflected in disincentives for large-scale producers: Refineries, despite their capacity
to do so, to fortify. Although Chaudhry (2018) contends that large-scale manufacturers
incur little expense in fortification, our data shows that doing so enables them to boost
profits, particularly for bulk items. Moreover, because bulk oil is not labeled, it is
impossible to identify particular makers of substandard oil even if it is found on the
market. As a result, producers are not penalized. If the fortification standards for their
bottled oil are not met, the sole penalty is reputational harm. This explains why
fortification of traceable products is superior to that of bulk goods.
● Reflected in the economic constraints facing small-scale producers: packers who
provide marginal households in remote locations with edible oil. Contrary to refineries,
packers engage in fewer operations that allow them to make a profit or where they may
look for cost savings. Packers' margins are being squeezed as a result of intense
competition from other packers and refineries. According to Randall and Anjum, another
form of pressure may have come from giving businesses credit in order to build a loyal
client base, which limited their cash flow (2014). Packers are encouraged to utilize
subpar premix as a result of these economic constraints. Moreover, given the wide range
of premix prices and quality offered by independent sellers in Bangladesh's wholesale
markets, it is challenging for packers to accurately gauge quality and make sure they are
paying a fair price.
● Inconsistent law enforcement: Compliance involves continuous inspection and
enforcement carried out as close to production locations as is practical. Efficient
enforcement is the key to compliance. Nevertheless, the current legislation mandates
fortification for both large- and small-scale producers, which causes uncertainty and
raises expenses for the latter. Also, while BSTI checks bottled oil, the market's bulk oil is
not currently being watched for fortification. BSTI does check refineries at the point of
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production, where fortification issues need to be discovered. The fact that under-fortified
bulk oil continues to exist, however, implies that these measures have been ineffectual.
Due to BVORA's adamant opposition to the adoption of LSFF, BSTI may potentially be
exposed to political risks and pressure from the producer association.
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Industry Players’ Steps to Meet Three Key Challenges
Cooking oil industry is a billion dollar industry in Bangladesh. Some of the industry big players
are Basundhara, Akij, City Group, Pran-RFL group, Meghna Group. They have been the most
successful in the cooking oil industry. For new entries it will be very hard to compete against
these giant players in the market.
But these key players also face many problems. Let's look at the industry players to meet the key
challenges.
Depended on Import:
Cooking oil like palm oil, soybean oil, corn oil, sunflower oil, mustard oil etc. As of January
2023 Bangladesh imported 18,848.000 BDT mn eligible oil or cooking oil. As we can see, the
Bangladesh cooking oil industry is a very import dependent oriented industry and it’s a big
problem for the industry players. When oil price rises in the global market or production
decreases the price of imported oil starts to increase.
As of 2023 inflation is very high and there is a shortage of dollar reserves which also impacted
the cooking oil industry. It's one of the key challenges faced by the industry players. So in recent
times the industry key players are trying to produce edible oil using local alternatives. This will
help to reduce dependence on imports in the future.
Increasing Competition and Meet Expected Demand:
Bangladesh is a small country with a huge population. The demand for cooking or eligible oil is
increasing day by day. New competitors are entering the mark. In recent times Bangladesh’s
government requested Argentina to establish an eligible oil factory with a low tariff. Which will
be a big issue for the key players in the cooking oil industry.
In recent inflation the Bangladesh government also restricted imports to reserve dollars. For this
reason meeting the expected demand becomes hard. So the industry key players try to negotiate
with the government to ask for necessary help to meet the expected demands of the market.
It's always a big challenge for the industry players to meet in the cooking oil industry.
Regulatory Compliance:
It's a very key and most important challenge for the cooking oil industry players to meet up with
regular compliance. Because if the government notice that any of the company doesn’t following
the given regulatory they can take action against it by fining them or close the production
factory.
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So ensuring compliance of the local laws and regulations governing the production, labeling and
distribution of cooking oil. It has to meet Bangladesh's Pure Food ordinance standards of the
BSTI ( Bangladesh Standards and Testing Institution) regulations.
Industry players have to do regular audits to ensure BSTI standards and regulations. Its also
plays an important role in marketing also. So this one of the key challenge are faced by the
industry players of cooking oil industry.
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Conclusion
By 2030, Bangladesh's economy is projected to grow to be the 26th largest in the world, making
it one of the wealthiest nations in Asia. Even throughout the pandemic, Bangladesh's GDP per
capita increased from USD 1,960 in 2020 to USD 2,130 in 2021, whereas surrounding countries'
GDP growth rates were on the decline. The country's spending per capita grew as a result, rising
from USD 1,470 in 2020 to USD 1,600 in 2021. Regularly consumed goods like protein and
edible oil saw an increase as more individuals could afford better quality food. According to data
from HIES 2016, by 2020, the average annual protein consumption per person was predicted to
be 37 kg, and that number is likely to rise.
According to the HIES 2016 data, the average annual protein consumption per person was
predicted to be 37 kg by 2020 and to increase at a CAGR of 2.07 percent over the following five
years. The consumption of major edible oils is currently at 2.7 million tons in the edible oil
sector, and it is anticipated to reach 3.65 million tons by 2025.
The Bangladeshi soybean crushing business has a bright future, even though the current global
situation has yet to stabilize. Crushing facilities must satisfy the need of feed makers, who now
import their raw materials from overseas, in order to be totally sustainable. Domestic soybean
meal prices are often sold at a premium price to compensate for production costs because crush
mills in Bangladesh have not yet reached their full operational capacity. The average difference
between domestic and imported soybean meal prices per metric ton is USD 34. High-quality soy
meal can lure feed makers away from the import market and into the domestic meal industry by
offering it at a price that is competitive.
In the long run, as both the feed and the edible oil industry are expected to grow, the soy
crushing sector looks promising for the domestic market.
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