Bangladesh's dependence on the US for soybeans has been increasing, particularly after the outbreak of the Russia-Ukraine war, with local traders, millers and conglomerates diversifying their sourcing for uninterrupted supply of edible oil and animal feed.

Prior to the war's outbreak in February 2022, Bangladesh was meeting around 15 percent of its annual demand with US soybeans. However, it has increased to 40 percent since the war erupted.

Previously, Russia and Ukraine were the major cultivators of soybeans , wheat and corn and a stable source not only for Bangladesh but also for other South Asian countries.

About 90 percent of the edible oil consumed in Bangladesh is now imported. Over 60 percent of it is soybean oil, with a majority coming from the US, while the rest is palm oil

Bangladesh's import of soybean products has been growing over the last couple of decades for changes in food intake owing to rapid urbanisation and a reduction in cultivable land for the economy shifting to industrialisation.

The imports grew 169 percent year-on-year in fiscal year 2023-24.

In the marketing year 2022-23, Bangladesh imported 3.76 million tonnes of soybean products from all over the world, according to the US Soybean Export Council (USSEC).

Of it, 1.08 million tonnes, valued at an estimated $302.95 million, were from the US, according to the USSEC and United States Department of Agriculture.

One of the prime imports is edible oil. Previously local growers used to meet a majority of the demand for edible oil with mustard seed and rapeseed.

But that scenario has changed as 90 percent of the edible oil consumed in Bangladesh is now imported. Over 60 percent of it is soybean oil, with a majority coming from the US, while the rest is palm oil.

Local importers say the US soybean products are increasingly being preferred mainly for assurances of supply continuity, seed and grain quality, nutritional value and favourable prices.

For instance, the damage ratio of US soybean products is around 0.50 percent while that of products from other countries is nearly 4 percent.

American soybeans are much better than the Brazilian and Argentinian ones as the damage ratio is lower, said Amirul Haque, managing director of Delta Agrofood, at Soy Connext 2024.

He set up a mill last November taking note of the growing local demand and now processes 2,500 tonnes of soybeans per day.

Some 35 percent of his soybeans are from the US, and he believes it would increase if their price remains competitive.

The Meghna Group of Industries also sources the same portion of its raw materials from the US for its mill at Meghna Economic Zone in Sonargaon under Narayanganj district, which has a crushing capacity of 3,000 tonnes per day.

Its executive director, Varun Goyal, said they use the US soybeans from November to February but Brazilian soybeans for the majority of the year because of their price competitiveness.

He, however, said they would have preferred the US ones for the quality even if the prices had been $4 to $5 higher per tonne.

City Group also sources around 40 percent of its soybeans from the US for its edible oil plant which has a pressing capacity of 5,000 tonnes per day.

The company will launch another plant with a 3,000-tonne capacity next month to meet growing demand for edible oil and soybean feed, said its director for planning and business development), Md Imran Uddin.

The US beans are preferred for their quality and golden coloured oil and it will increasingly be used, he said on the sidelines of Soy Connext 2024.

Bashundhara Multi Food Products was also seeking information at the event on hearing of the assurance of competitive prices and supply continuity.

Its chief operating officer, Syed Farhad Ali Reza, said they would open a mill in November this year with a crushing capacity of 5,000 tonnes per day.

These gave hope to American soybean farmers, traders and government officials at the three-day Soy Connext, an annual signature summit of the USSEC ending today at San Francisco Marriott Marquis.

"I think the price of soybean oil and soybean meal increased over the last few years due to the demand increase," said farmer Jerry C Gaffner who produces around 35,000 bushels of soybeans a year on 525 acres of land in Illinois.

"…you now see the prices dropping rapidly due to the increase in supply of soybeans both in the United States and South America," he said.

Apart from quality, the Russia-Ukraine war played an important role for the increase in the import of US soybeans, said Khabibur Rahman, country team lead, Bangladesh of the USSEC.

There is a lot of potential as Bangladesh has an annual crushing capacity of 4 million tonnes, including those of big conglomerates like City Group, Meghna Group, Delta Agro, TK Group and Bashundhara Group, he said.

Currently, the mills crush 2.2 million tonnes of soybeans a year, he added.