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The worst drought in Argentina has raised concern for the Bangladeshi animal feed industry that largely relies on imported Latin corn and soya meal, said insiders.
Bangladesh has a demand for 6.5-7.0-million tonnes of corn and soya cake, and it locally sources 5.5-6.0-million tonnes, according to the Feed Industries Association of Bangladesh (FIAB) and commerce ministry.
It imports the rest 1.0-1.5 million tonnes, mainly from Latin American counties Argentina and Brazil, Indonesia, Ukraine and neighbouring India.
After hitting a record $350 per tonne in April 2022, global corn prices have cooled down to $220-250 in recent months, show global commodity web portals.
But cattle, poultry and fish feed prices have reached a record high of Tk 58-120 a kg here, marking a hike of 70-85 per cent in the 18 months, FIAB said.
Meanwhile, poultry, fish and cattle meat have reached beyond the purchasing power of commoners.
As the Trading Corporation of Bangladesh and the Consumers Association of Bangladesh (CAB) cited, costly feed has caused a hike of 20-54 per cent in meat prices.
The situation may take a turn for the worse as Argentina, the world's top exporter of processed soy and number-three source of corn, is in the grip of its worst drought in more than 60 years.
The Argentine drought has led to repeated sharp cuts to harvest forecasts, according to a recent report published on the Al Jazeera website.
Those forecasts were reduced again on March 09 by 'the Buenos Aires Grain Exchange' after 'the Rosario Exchange' slashed its soy production outlook to 27-million tonnes, the lowest since the turn of the century, said the report.
Julio Calzada, head of economic research for the Rosario Exchange, said it is unprecedented that the three crops have failed.
"We're all waiting for it to rain," he added.
"The drop in Latin output may cause a further hike in global corn and soya prices, which will definitely influence costs in the domestic market," said Khondaker Monsur Hossain, managing director of Aleya Feeds Ltd.
He said corn price is now Tk 38.5 a kg in the domestic market, although harvest begins in many areas while soya meal was trading at Tk 76-82 a kg.
The corn season started with Tk 30 a kg last year and Tk 22-24 a kg in 2021, he told the FE.
The local industry needs 5.5-million tonnes of maize and 1.5-million tonnes of soya cake.
Mr Hossain said 30-35 per cent materials are still imported from abroad.
Dr Debangshu Bikash Bhowmik, director of Agata Feed Mills Ltd, said soya cake prices have gradually been fuelling up making trading hard.
Soybean oil refiners are fixing prices of cake at their sweet will, he added.
Mr Bhowmik said local corn production might rise this year as the acreage has increased amid good prices gained by farmers last year.
But higher production could not ensure lower prices during this volatile global market, he added.
Production was bumper in 2022 but prices ranged between Tk 32-36 a kg, which was Tk 20-26 in 2021, cited Mr Bhowmik who has been working in the sector for decades.
FIAB general secretary Mohammad Nazrul Islam said minimum production cost of broiler feed is now Tk 70 a kg, which is 80 per cent higher than a year ago.
Monthly feed sales have dropped to 0.4-million tonnes in recent months, marking a 25-per cent fall amid the closure of both feed mills and poultry farms.
Mr Islam said annual sale of feed reached a record 6.2-million tonnes in 2019, which showed a decline from 2020 with the spread of Covid-19 virus.
On the poultry price issue, CAB secretary Humayun Kabir Bhuiyan said poultry meat, egg, beef, mutton and fish prices have increased 30-54 per cent in a year mainly due to the skyrocketing trend of feed prices.
He said the government should regulate the feed raw material issue so the industry could source them at rational rates.
The import of corn and soya meal should be eased to help cut prices of local soya cake and corn to some extent, observed Mr Bhuiyan.