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Rice bran oil export on the rise

Mehedi Al Amin
14 May 2022 00:00:00 | Update: 14 May 2022 01:04:09
Rice bran oil export on the rise

Bangladeshi companies, after meeting the domestic demand, have exported 125,000 tonnes of crude rice bran oil, worth $175 million, in the first 10 months (July-April) of the current 2021-22 fiscal year.

That is $17 million more than the previous year’s $158 million, according to data revealed by the Export Promotion Bureau (EPB).

Export earnings in the first nine months of this fiscal — $159 million — had also exceeded the amount during the same period last year. On average, the country is exporting $17.5 million worth of rice bran oil every month.

Producers and exporters are hoping to export at least 150,000 tonnes of rice bran oil and earn around $210 million at the end of this fiscal, backed by their preference to sell to international markets instead of the local ones for various reasons.

India is the destination where the majority of the rice bran oil is being exported. The neighbouring country imported oil worth $174 million from Bangladesh in the 10 months.

Malaysia imported $299,831 worth of oil; followed by United States at $251,171; Japan $55,958; Singapore $24,531; Great Britain $17,703; New Zealand $16,814; and Australia $10,382.

Apart from these countries, China, Belgium, Romania, Austria, Russia, Saudi Arabia, Ireland, and France also imported some rice bran oil from Bangladesh.

Generally, the export price of rice bran oil per tonne remains around $1,400. However, a few days ago, it was $1,660. On Thursday, the price was $1,625.

Why traders prefer exporting

Over the past two weeks, Bangladesh fell into an edible oil crisis where insufficient supply despite adequate imports and an absurd rise in prices left consumers reeling. Amid this situation, when many are looking for cheaper alternatives to soybean and palm oil, the rice bran oil producers are going for exports instead of selling in the local markets because of the recent rise in export price.

“Most of the time, the export price remains at around $1,400,” said Nayeem Hasan Rupom, director of Tamim Agro Industries Limited — which received the top rice bran oil exporter certificate from Bogra Chamber of Commerce & Industry in 2021 after exporting Tk 143.47 crore worth of oil last year.

“But now, both export and local prices are increasing simultaneously. Recently the export price even rose to $1,660, which means we can get Tk 145 per kg for crude oil. That’s great for us as the export market is stable,” he told The Business Post.

“On the other hand, we have to compete with other types of edible oils in the local market around the year. We have marketing and bottling costs. Moreover, local dealers and wholesalers often delay paying the dues,” he said explaining why they prefer to export.

At present, Tamim Group sells Tk 50 lakh worth of bottled rice bran oil, Dhaani, each month only in the local market and exports the rest of its production.

According to an official of Bangladesh Edible Oil Limited, which sells Fortune rice bran oil in the local markets, oil volume reduces by around 5-6% during the refining process from the crude form. So it will be less profitable to sell refined oil domestically, which is another reason why rice bran oil producers prefer to export.

Back in 2015, at least 10 rice bran oil brands were available in Bangladesh’s market but the number has come down to only three in recent times.

A few years back, the maximum retail price (MRP) of per litre refined rice bran oil was Tk 125-130 in the local market.

Apart from Fortune and Dhaani, only Nutrilife rice bran oil of ACI can now be found in the kitchen markets in Dhaka alone.

A five-litre jar of Fortune is currently sold at Tk 905 and Nutrilife at Tk 930.

The by-product

Apart from the oil itself, producers are also earning a notable amount of money by selling de-oiled rice bran (DORB), which is produced when the crude oil has been extracted from rice bran.

Stakeholders say that one litter of crude oil can be extracted from 5.5 kilograms of rice bran.

The current market price of de-oiled rice bran is Tk 20 per kg.

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