Due to COVID – 19, consumtion vis-à-vis import of edible oils have declined significantly, like many other commodities. Until April 2020, total 566,771 tonnes of palm oil was imported in the country registering a marginal decline by 1.55% compared to the corresponding period of 2019, whereas import quantity of CDSBO, the main competitor of palm oil, was 345,920 tonnes which declined by 18.20% compared to the corresponding period of 2019. These two oils constitute almost 85% of total edible oils consumed in the country annually.
The Lockdown Syndrome:
Prevailing lockdown, which imposed on March 25, will continue till May 31, 2020 and likely to be extended further because of gradual increase of corona virus affected people. Thus food processing industries, hotel & restaurants and other industries linked with consumption of palm oil won’t be able to run normally in near future. Hence the main demand creation in coming months would be based on homestead consumption.
Consumption trend of palm oil as cooking oil will continue as in the past in rural areas – the main consumer segment of palm oil. This is because they have money to spend on food consumption because of the current bumper rice harvest. Moreover, they are least affected segment of the population by COVID – 19. However, CDSBO import is likely be affected as urban middle-class consumers, the main consumer segment of soyabean oil, are very negatively affected by COVID – 19 related economic distress.
As the end April 2020 palm oil stock level is about 123,000 tonnes lower compared to April 2019 end stock, at least another 200,000 to 220,000 tonnes of palm oil needs to be imported by June 2020 to meet market demand. As gathered from market sources, importers cum refiners have booked about 80,000 to 100,000 tonnes of RBD Olein for arrival in the country within May/by early June period. Another 100,000 to 150,000 tonnes of RBB Olein for delivery by end of June 2020 is under active consideration.
Because of prevailing demand trend, importers are cautious in taking the decisions on import of CDSBO. As per market sources, 45,000 tonnes of CDSBO would arrive in the country in May and another 25,000 to 30,000 tonnes in June.
Palm Oil Import Scenario:
During Jan.-April 2020, the import quantity of RBDPO and RBD Olein, in bulk, was 558,246 tonnes of which 84,175 tonnes i.e. about 15.08% was from Malaysia and 474,071 tonnes i.e. about 84.92% was from Indonesia. During Jan.-April period of 2020, the import volume of MPO, in bulk, witnessed a staggering increase by 258.19% (60,675 tonnes) compared to Jan. – April 2019 period and that of IPO witnessed a noticeable decline by 13.57% (74,457 tonnes). Detail on the same be seen at Table – 1. Total import of palm oil, only in bulk, during Jan. – April 2020 period declined by 2.41% compared to 2019.
|Table–1: Bangladesh CPO, CPL and RBD PO/PL Share (MT) Bulk Import|
|Source||Jan.-Apl. 2020||Jan.- Apl. 2019||Changes (Vol.)||Changes (%)||Jan-Dec 2019|
|Source: Chittagong Port Authority/Bulk Storage Terminals/Importers and MPOC Market Intelligence|
Besides the aforesaid import quantity of RBD PO and RBD Olein, a quantity of 8,525 tonnes of RBD PL arrived from Malaysia in drums/ flexi tanks during Jan. – April 2020 period, but this quantity has not included in Table – 1.
Considering the present price competitiveness of MPO, it is expected that MPO would be able to uphold its share in country’s total import quantity of palm oil, which has achieved during Jan. – April period of 2020, during May to June period also.
Prepared by Fakhrul Alam
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