Country’s soya bean oil refiners said that the trade war between the United States and China could bring opportunity for Bangladesh to import low cost soya bean from the US as the price of the item has started to fall after China imposed tariffs on $34 billion worth of US products, including soya beans and cotton, on July 6.
China imposed the tariff in retaliation for US tariffs enacted the same day on Chinese goods of equal value.
International media reported that the prices of US soya beans started falling due to decline of China’s purchases while the prices of the item jumped in the Brazilian market due to Chinese import.
They are instead loading up on Brazilian soybeans, which now sell at a premium of up to $1.50 a bushel as US soybean futures have fallen 17 per cent over six weeks to about $8.50, their lowest level in nearly a decade, reported Reuters.
Businesses in Bangladesh said that the US-China trade war would not affect the soya bean oil market here rather it could create an opportunity for the country to import soya beans at lower prices from the US.
‘We are observing the international market. If convenient we will go to US market for importing soya beans,’ Tariq Ahmed, director (marketing and operation) of TK Group of Industries, told New Age on Saturday.
TK Group holds the largest share of edible oil refining capacity in the country.
Tariq said that Bangladesh imports crude soya bean oil mostly from Brazil and Argentina while the US mainly exports soya beans. Very few Bangladeshi companies started crushing of beans and they can get benefit of lowers prices of the items in the US market.
Like beans, , Tariq said, if the prices of crude soya bean oil fall in the US there was no doubt that Bangladeshi refiners would take the opportunity.
China has been importing more than 100 million tonnes of soya bean every year and 30 per cent of the quantity comes from the US, Tariq said. ‘It is usual that the prices of beans will be increased in Brazil as China is shifting its major purchasing to Brazil from US.’
Citing data of the US Department of Agriculture, Reuters reported that China buys two-thirds of the world’s soya bean exports and, historically, more than half of US soybean shipments, worth $12.25 billion last year.
Tanvir Hydar, director (finance) of City Group, said that they import soya bean oil from Brazil, Argentina and the US and if the prices of crude oil decline in the US market his company would increase its purchase from the US. ‘US is the largest soya beans producing country in the world and if the prices of the item decline in the market importing countries would be benefited.’
Mohammed Helal Uddin, an associate professor of economics at the University of Dhaka, argued that Bangladesh would not be affected if the prices of soya beans increase in Brazil to meet Chinese demand as the US could be the alternative source for Bangladesh.
According to Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association, yearly import of crude vegetable oil is 20 lakh tonnes and 30 per cent of it is soya bean oil.