Poultry and cattle farming have become an integral part of Bangladesh’s agro-based economy and rural livelihood. The sub-sectors of agriculture are livestock, poultry, fish and fisheries. Due to increasing demand, commercial poultry, cattle and fish farms have been gaining prominence over the last two decades. To cater to the huge demand of the feed from the poultry, cattle and fish farms sectors, commercial feed production has experienced substantial growth in the country in the last one decade. More than two-thirds of the current commercial feed market comes from the poultry industry. The cattle feed market remains the most under-developed among the three sectors.
Table 1: Livestock Population of Bangladesh (In Million Nos.)
| Name of Species | 2019-2020 | 2018-19 | 2017-18 | 2016-17 | 2015-16 |
|---|---|---|---|---|---|
| Cattle | 24.391 | 24.238 | 24.086 | 23.935 | 23.785 |
| Buffalo | 1.493 | 1.486 | 1.479 | 1.478 | 1.471 |
| Sheep | 3.607 | 3.537 | 3.468 | 3.401 | 3.335 |
| Goat | 26.435 | 26.267 | 26.100 | 25.931 | 25.766 |
| Total Ruminant | 55.926 | 55.528 | 55.133 | 54.745 | 54.357 |
| Chicken | 296.602 | 289.283 | 282.145 | 275.183 | 268.393 |
| Duck | 59.716 | 57.752 | 55.853 | 54.016 | 52.240 |
| Total Poultry | 356.318 | 347.035 | 337.998 | 329.199 | 320.633 |
| Total Livestock | 412.244 | 402.563 | 393.131 | 383.944 | 374.990 |
Source: Director of Livestock, Govt. of Bangladesh
Latest data by industry source shows that prevailing feed meal market size is about 4.0 million MT and the annual growth is approximately between 9% to 10%. Presently, about 60,000 to 80,000 tonnes of vegetable oils are used annually to fortify the feed meal produced locally. The demand for the vegetable oils required is being met by locally produced rice bran oil and refined soybean oil. However, refined olein could be an appropriate substitute due to the price competitiveness, and this will open a new horizon for palm olein market in Bangladesh. At present, there are about 10,000 to 12,000 tonnes of PKE and an insignificant quantity of powdered palm fat imported from Malaysia to meet the untapped demand of these two commodities.
The following tables show the price competitiveness of refined olein compared to rice bran oil and soybean oil:
Table 2: Monthly prices of refined soybean oil, crude rice barn oil and refined olein in 2019
Price per Litre in US$
| Type of Oil | Jan | Feb | Mar | Apr | May | June | July | Aug | Sept | Oct | Nov | Dec |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Refined soya | 1.0 | 1.04 | 1.06 | 1.04 | 1.0 | 1.0 | 1.0 | 1.04 | 1.04 | 1.06 | 1.12 | 1.15 |
| Crude Rice bran | 1.18 | 1.10 | 1.15 | 1.10 | 1.10 | 1.10 | 1.10 | 1.10 | 1.14 | 1.16 | 1.18 | 1.16 |
| Refined olein | 0.77 | 0.80 | 0.80 | 0.73 | 0.71 | 0.73 | 0.77 | 0.78 | 0.79 | 0.83 | 0.82 | 0.92 |
Source: MPOC Market Intelligence
Table 3: Monthly prices of refined soybean oil, crude rice barn oil and refined olein in 2020
Price per Litre in US$
| Type of Oil | Jan | Feb | Mar | Apr | May | June | July | Aug | Sept | Oct | Nov | Dec |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Refined soya | 1.15 | 1.12 | 1.07 | 1.04 | 1.06 | 1.06 | 1.04 | 1.07 | 1.16 | 1.16 | ||
| Crude Rice bran | 1.15 | 1.08 | 1.10 | 1.15 | 1.15 | 1.15 | 1.08 | 1.10 | 1.15 | 1.15 | ||
| Refined olein | 0.97 | 0.89 | 0.85 | 0.83 | 0.80 | 0.80 | 0.83 | 0.86 | 0.95 | 0.95 |
Source: MPOC Market Intelligence
Covid-19 Impact on Cattle Farming
However, the country’s cattle farming industry has been impacted badly by the Covid-19 pandemic. As per the statistics of Director of Livestock, Government of Bangladesh, on an average, nearly 10.5 million cattle are slaughtered in the country annually and almost 50% of these numbers are slaughtered during the Muslim festival Eid Ul Adha. According to Department of Livestock Services (DLS), some 5.5 million cows and 6.0 million goats, sheep and buffalos have been reared at the cattle farms in different districts to meet the Eid Ul Adha demand. This year due to Covid-19, demand of sacrificial animals has declined significantly which caused huge financial loss for the cattle farmers. Besides, Covid-19 has affected the non-festival demand of cattle noticeably. Covid-19 came as a havoc for the middle and lower middle segment of consumers. Income of these segment of consumers has fallen significantly which forced them to reduce the spending on food and caused decline of consumption of meat.
Owing to the aforesaid situation, the cattle farmers in the country are in great financial difficulties and facing problem even in providing proper feed to their respective herd. Until now, the government has yet to declare any financial assistance or incentives to support the cattle farmers, which could contribute in rescuing the cattle farmers from financial crisis. Due to this, the import of cattle feeds especially PKE has been experiencing a significant decline since the outbreak of Covid-19 since beginning of 2020.
Latest data shows that during January to September 2020, import of palm kernel expeller to Bangladesh recorded only 206 MT, compared to almost 11,000 MT registered during the same period last year.
Table 4: Import Quantity of Palm Oil Products for Noon Food Uses: 2015 – 2020
In Tonnes
| Commodities | 2020 (Jan – Sept) | 2019 (Jan – Dec) | 2018 (Jan – Dec) | 2017 (Jan – Dec) | 2016 (Jan – Dec) | 2015 (Jan – Dec) |
|---|---|---|---|---|---|---|
| Crude/RBD PS | 29,932 | 29,619 | 32,323 | 9,765 | 4,455 | 120 |
| PKO & PKO Products | 12,281 | 16,058 | 18,800 | 30,018 | 21,669 | 15,579 |
| Palm Based Fats | 5,715 | 6,282 | 5,390 | 2,816 | 2,856 | 3,328 |
| PFAD/Acid Oil/Residue Oil | 1,541 | 1,794 | 3,306 | 2,826 | 2,002 | 3,930 |
| Oleo-chemicals | 29,247 | 29,957 | 25,255 | 23,647 | 25,402 | 25,175 |
| Palm Kernel Expeller | 206 | 10,972 | 7,406 | 1,297 | 994 | 261 |
| Palm Kernel Cake/ Meal | 417 | 96 | 578 | 100 | – | – |
| Total | 79,339 | 94,682 | 93,058 | 70,469 | 57,377 | 48,393 |
Source: MPOB and MPOC Market Intelligence
Note:
- Palm stearin and PKO/PKO based product figures are total of the quantity imported from Malaysian and Indonesia, while the rest items are fully Malaysia origin.
Growth Forecast
Amidst the challenges posed by the global Covid-19 pandemic, the cattle feed segment offers the largest growth among all the segments. Fattening Cattle Feed, which is currently the smallest sub-segment, is expected to grow the most at a rate of about 15-16% annually, while milk, which is another sub-segment of the Cattle Feed category is expected to grow at a rate of about 12%. Despite being the largest segment, the Broiler Feed is expected to grow the least among all the segments.
Driven by the increase in population as well as rising demand for meat, milk and eggs, poultry and cattle farming industry are expected to continue expanding in the near future. Since the growth of cattle farming is enormous, mainly due to the indigenous demand, the import potentials of PKE and powered fats cannot be discounted. Moreover, the local production of the feed is still low due to the insufficient raw materials to produce the feed. Price competitiveness of PKE and powdered fats over other raw materials will be the major factor in determining the import demand for this product. Malaysian companies could take cue from this sector by creating the awareness of the benefits using palm olein in fortification of feed meal and use of PKE and powdered fats as cattle feed among the local cattle farm owners as well as feed meal producers.
Prepared by: Fakhrul Alam and Azriyah Azian
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