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Trump’s high tariffs on China may lower edible oil prices: importers
PHOTO: STAR/FILE
REFAYET ULLAH MIRDHA
The Trump Administration’s imposition of high tariffs on goods made in China may help to reduce the price of soybean seeds and edible oil in Bangladesh, traders and importers said.
China’s retaliatory tariffs may also discourage Chinese importers from buying US goods, they added.
If Chinese importers reduce imports of US goods, the demand for US soybean oil will fall, leading to a drop in prices. When the price of soybean falls in the US, the price will similarly fall on the global market, according to them.
China is the largest importer of US soybean oilseeds at present, but may soon decide to source soy oilseeds from Brazil and Argentina, they said.
The prices of poultry feed, dairy products and cattle feed may also fall in line with the drop in edible oil prices.
Bangladesh’s annual demand for edible oil stands at 25 lakh tonnes. Imports from the US meet nearly 45 percent of this requirement.
The price of American soy seeds is now in a downtrend, said Md Taslim Shahriar, deputy general manager (accounts) at the Meghna Group of Industries (MGI).
Soybeans are currently being sold at $480 per tonne on the global market, down from $530 per tonne six months ago, he said.
He added that prices may fall further if the Russia-Ukraine war is halted, saying around 50 to 60 local feed mills were forced to close down due to the effects of the war and the sharp depreciation of the Bangladeshi currency against the US dollar.
Shahriar made the remarks at the two-day Crushcon, a programme for traders organised by the US Soybean Export Council (USSEC). The event was held simultaneously in Dhaka and Dubai on November 13-14.
However, edible oil prices may be affected by Indonesia’s decision to increase biofuel generation from palm seeds, especially as around five percent of palms were damaged due to inclement weather, the senior MGI official said.
Indonesia currently has a mandatory 35 percent blend of palm oil-based fuel in biodiesel and is seeking to ramp up to biodiesel containing 40 percent palm oil to cut its energy imports, according to a Reuters report.
“Soybean prices will go down further as it is the peak season for soybean harvests. So, there is a good supply now,” added Md Sariful Islam, owner of PCF Feed Industries in Dhaka.
Rafiqul Islam, manager of procurement (import) at Aftab Feed Products Ltd, said it is difficult to say whether the imposition of higher tariffs levied on China by the US would help reduce prices of soybean meal since it did not happen during Trump’s last tenure despite the same measures.
He also said Trump prefers trade to war, adding that if the Russia-Ukraine war is stopped, stability may reduce global soybean prices.