Home ›› 15 Aug 2021 ›› Front
Over a decade, a popular kitchen staple – Rice Bran Oil – has become a household name regarding quality and health benefits.
A relatively new entrant in the category of cooking oils, it made a name in the priority list of consumers, with a variety of local brands saturating the market.
A Bangladesh Trade and Tariff Commission research in 2015 found that there were 13 companies producing rice bran oil with a cumulative volume of 90,000 tonnes.
However, in a recent visit to many outlets of super shops besides the biggest kitchen market at Karwan Bazar in the capital, it was found that only three brands – Fortune, Nutrilife and Dhani – are available there.
It was learned that producers are more intent on exporting this edible oil in crude form than supplying it to the local level after refinement.
“The export price of crude oil is much higher than that of refined one. This is the main reason behind an emphasis on export,” said Nayeem Hasan Rupom, director, Tamim Group of Industries.
A few brands available in the domestic market do not suggest that oil production has gone down or factories are shut. Actually, factory owners are reluctant to refine oil and keen to produce crude oil and export, explained Nayeem.
“Per ton of crude oil is priced between $1,300 and $1,500 that fetches them a huge sum,” the businessman gave an estimate.
However, by investment category rice bran oil industry was considered a big one while the first of its kind came into being in 2009.
The tariff commission found that 10 oil-producing companies created their own brands such as Health Care, White Gold, Spondon, Swarna, Basmoti, Kollyani, Pure Gold, Al Noor, Branola and Sera. Later another brand named Dhani joined the cohort.
In the meantime, two other brands – Fortune and Nutrilife – hit the local market through Bangladesh Edible Oil Company Limited and ACI Edible Oil Limited, respectively, that merely outsource the product.
Export grew 187 fold in seven years
According to the Export Promotion Bureau (EPB), rice bran oil made an export worth around $0.8 million in the Fiscal Year 2013-14, which reached $158 million in FY 2020-21, an increase by 187 fold in the last seven years.
India is the largest export destination of crude rice bran oil. More than one lakh ton of such oil
worth $156.71 million was exported to the neighbouring country in the last fiscal year. Other export destinations include Austria, Australia, Brunei Darussalam, Canada, China, Great Britain, Ireland, Japan, Korean Republic, Malaysia, New Zealand, Romania, Saudi Arabia, Singapore, the United States and South Africa.
New investment in the sector
In 2014-15, there were 13 factories in operation. In the last seven years, three factories stopped oil production while three others grew in the same period.
Moreover, SPS Agrotech Limited, an India-Bangladesh joint venture company, is going to make a fresh investment of $6.69 million in Iswardi Export Processing Zone (EPZ) for establishing a rice bran oil factory.
They have made an agreement with Bangladesh Export Processing Zones Authority in this regard on June 30. The company will produce 1,50,000 tonnes of rice bran oil annually.
Majumder Group Managing Director Chitta Majumder, also a Bangladeshi Partner of SPS Agrotech Limited, said there is relatively less demand for rice bran oil in the local market, but it has a huge demand abroad. For this reason, oil producers turn to export.
“Our own brand – White Gold – is not out of the market. There is a huge scarcity of rice bran in the country as husking mills remain closed while the government imports rice,” added Chitta, the Bangladesh Rice Bran Oil Mills Association president.
Export price vs local price
The maximum retail price (MRP) of per litre refined rice bran oil was Tk 125 to Tk 130 a few years back in the local market.
A five-litre jar of Fortune brand sells at Tk 905 and Nutrilife Tk 930 currently. However, exporters earn Tk 110 to Tk 125 from the sale of per litre crude oil.
Excluding retailers’ commission, transport and other associated costs, producers get less money from refined oil sales than that of unrefined one, which ends up in export, according to the oil traders.
Moreover, retailers delay paying their dues, they added.
The association’s General Secretary Abdur Rashid said producers do not have confidence in the local market. They are keen on the export of crude oil that fetches them a good price.
Rice bran oil production is growing slowly. When production reaches the peak, it will be able to meet domestic demand besides meeting the export target, added the business leader.
According to International Rice Research Institute (IRRI), 100kg paddy produces 5-7kg of bran. One kg bran oil can be extracted
from 5kg bran. De-oiled Rice Bran (DORB), used to make animal feed, is sourced from the rest 4kg bran. Per kg DORB is sold for Tk 17 in the local market.
The country can produce 40 lakh tonnes of bran per annum. A total of 5.75 crore tonnes of paddy was produced in FY2020-21.
