Bangladesh is self-sufficient in animal feed production, but raw materials for this industry, including maize and soybean meal, are still imported, causing feed prices to rise.
Maize and soybean meal have become pricier in the international market. Moreover, prices of all types of feed raw materials have risen by about 40%, creating a crisis in the feed industry.
Feed prices have risen at production and retail levels, which may lead to a crisis in poultry, fisheries, and cattle industries.
There is another crisis involving exports of locally produced soybean meal.
The government has allowed two companies to export soybean meal to India, making feed producers concerned.
Maize and soybean meal together account for 75% in animal feed production, including 50% maize and 25-30% soybean meal. The remaining 20-25% includes other ingredients.
Maize is a major component of animal feed. 50% of maize is locally produced and the rest is imported.
But a decade ago, maize was fully dependent on imports.
As maize cultivation increased in the country over the past few years, industry people said import dependency was falling.
Soybean is not produced in the country, but after producing oil from soybean seeds imported by oil producing companies, soybean meal comes as a by-product.
This meets 55-60% of the local feed industry demand and the remaining 40-45% is imported.
Feed Industries Association Bangladesh (FIAB) President Ihtesham B Shahjahan told The Business Standard the feed industry buys locally produced maize.
Money can be saved if all the feed industry raw materials can be locally produced, he said.
"In that case, we will also be able to become self-sufficient in feed raw materials production," he added.
The country's livestock sector is going through a major crisis due to the coronavirus pandemic. The rise in feed prices is worsening the crisis.
Maize production rises
Local maize production doubled in the last five years riding on the demand among local feed producers.
But there is still a deficit compared to demand.
The local demand for maize as animal feed is 70 lakh tonnes.
According to the Department of Agricultural Extension, 56 lakh tonnes of maize were produced in the 2020-21 fiscal year.
Maize production was 27.59 lakh tonnes in the 2015-16 fiscal year.
Soybean meal annual demand 18-20 lakh tonnes
Entrepreneurs in this sector say more than 200 companies currently manufacture animal feed.
Local companies produce broiler feed, layer feed, fish feed, and cattle feed.
The annual demand for soybean meal in the country is about 18-20 lakh tonnes. Of this, 55-60% is supplied locally by soybean oil producers.
The remaining 40-45% is imported from India, America, Brazil, and Argentina.
Ahsanuzzaman, general secretary of FIAB and director (operation) of Spectra Hexa Feeds, said, "If local companies now export soybean meal, there will be a crisis in the domestic market. This will then create a crisis in the poultry and fisheries industries. Many feed manufacturers will not survive the crisis."
Concern over soybean meal exports
Recently, City Seed Crusher Industries and Meghna Seeds Crushing Mills got approval to export soybean meal to India.
Local feed mills used to import soybean meal from India. But India stopped exporting due to an abnormal rise in prices in the international market.
Indian companies are now importing soybean meal from Bangladesh due to lower prices.
Feed producers fear soybean meal exports will create a crisis in the livestock sector.
The FIAB president thinks the government's decision to export soybean meal is an example of mismanagement.
He said the government was emphasising protein production but was also allowing soybean meal exports.
This would affect entrepreneurs in the domestic poultry farm and feed industry, he said.
The FIAB thinks if there is a soybean meal crisis, feed production at many local mills may stop.
It has written to the commerce ministry, the fisheries and livestock ministry, the National Board of Revenue, and the livestock services department, demanding soybean meal exports be halted.
According to the association, the decision to allow exports has increased soybean meal prices by Tk4-5 per kg in the local market.
It also says prices have been raised by creating an artificial crisis, and the poultry industry is feeling the impacts.
The FIAB said in its letter feed accounts for 70% of the expenditure on fish, poultry, milk and egg production.
Besides, about 70-75% of fish and animal feed production cost is spent on procuring raw materials.
Maize, soybean meal, rice husk, fish meal, flour, oil, vitamin and mineral are the main raw materials for feed, most of which are imported.
The letter said with the rise in prices in the international market, local producers are also increasing soybean meal prices.
Farmers are facing big losses due to low prices of fish, poultry, eggs, and cattle. Many farms have closed.
Ahsanuzzaman said Bangladesh already has a feed raw material crisis and exports in this situation would be detrimental to the domestic industry.
"It will actually benefit Indian farmers. The export decision is not logical," he said.
Ihtesham said at a time when the local industry needs help amid the pandemic, soybean exports will increase the cost of feed production.
The prime minister is emphasising food and protein security, but soybean meal exports will have negative impacts, he added.
The size of the local poultry and feed industry is about Tk35,000 crore. Investment in the industry is around Tk10,000 crore.
The industry grew by around 25% in the last decade on the back of a surge in poultry, fish, and cattle farming.
Annually, the sector grew by 12-15% and witnessed a 161% jump in production over the last seven years, said industry people.