Hiked palm oil price pushes up animal fat demand

The animal fat price has gone up this year as its demand as raw material has increased in different types of factories.

The recent palm oil price hike has also played a major role behind the animal fat price hike, say hawkers, vendors and officials of the Council of Palm Oil Producing Countries (CPOPC).

Vendors, hawkers and middlemen claim that palm oil producers and wholesalers are buying animal fat to mix it with palm oil and make more profit.

However, the CPOPC has refuted their claim and blamed the soap factories for buying animal fat at a high rate as the price of Palm Fatty Acid Distillate (PFAD) has gone up.

Mohammad Swapan is a middleman who collects 50-100 tonnes of animal fat from Kalshi and other areas of Dhaka city during Eid-ul-Azha every year. He has been doing this business for 10 years.

Talking to The Business Post, he said, “I supply animal fat to palm oil factories, soap making factories and different types of food processing factories, including Chanachur.

“The animal fat price has gone high because the palm oil wholesalers in the Lalbagh area are our main buyers this year.”

This year, the price has risen to Tk 90 per kilogram. Last year, it was Tk 70, he said.

Hawkers are also making more profit this year, said Delwar Hosain, who collects animal fat from different residential areas of the capital. Around 150 hawkers from Mirpur’s Kalshi supply fat to Swapan.

“I collect animal fat at Tk 50 per kg from the residents who sacrificed animals during Eid and sell at Tk 70 to the middlemen,” said Delwar. “Last year, I was able to sell at Tk 58-60 to the middlemen.”

Another hawker, Khokon, said, “We collect the minimum amount since middlemen sell to the palm oil factories and we cannot go there directly.”

Meanwhile, AKM Fakhrul Alam, the regional manager of CPOPC, said that the palm oil price is high this year which means the rate of PFAD, a by-product of the refining process of crude palm oil products, is also high.

“PFAD is a raw material for soap production. Soap producers are buying animal fat this time due to the high price of PFAD,” he said.

“However, there is no way to mix animal fat with palm oil,” he said, refuting the claims of hawkers, vendors and middlemen.

Both vegetable fat and animal fat are used as raw materials to produce washing soaps. This year, more soap will be manufactured using animal fat.

Palm is the highest consumed oil in Bangladesh. Most restaurants and bakeries use palm oil.

According to government data, 1.31 million tonnes of palm oil and 0.41 million tonnes of soybean oil were imported in 2020.

Palm oil currently sells at Tk 170 per kg in markets around the country.