Corn import to fall as dollar shortage persists
Bangladesh's corn import may plunge in the marketing year (MY) 2023-24 beginning from May owing to reduced requirement of feed in poultry, aqua and other farms, and difficulties faced by millers in importing goods amid the ongoing forex shortage in the country, according to a recent report by the US Department of Agriculture (USDA).
Corn import may decline 41 percent year-on-year to 12 lakh tonnes in MY24, it said in its grain and feed update on Bangladesh, issued recently.
"This adjustment considers the current economic slowdown in the country and the uneven performance of the feed industry," said the USDA report.
Citing industry contacts, it said Bangladesh imported 4 lakh tonnes of corn in the first seven months of MY24. It added that many medium and small mills are grappling with shortage of key feed ingredients, corn and soybean meal, as they face challenges in opening letters of credit as a result of shortage of dollars.
Large mills also face difficulties in LC opening, said the USDA.
Despite the decline in imports, local production of corn or maize is forecasted to increase 7 percent to 52 lakh tonnes in MY24 from 48.5 lakh tonnes the previous year.
The report said corn, the second-largest cereal crop in Bangladesh which is grown by farmers as a cash crop, is a major ingredient for feed mills, which consume 70-75 lakh tonnes of the grain to make feed for poultry, fish and dairy farms.
So, given the USDA's projection regarding local production, increased local production will meet the demand for feed, consumption of which may fall to 7.6 percent year-on-year to 60 lakh tonnes for the current MY, ending in April 2024, according to the report.
"The high prices of poultry, aqua, and cattle feed have reduced their demand at the farm level," said the agency in its report, adding that all types of feed prices increased by about Tk 6,000 per tonne from October to November 2023.
In the second week of December, the average price of poultry feed reached Tk 66,000 per tonne, up 20 percent compared to the same period last year.
Similarly, the average price of aqua feed in December 2023 reached Tk 85,000 per tonnes, 25 percent higher than last year, according to the USDA.
"Many small and medium poultry and cattle farms have shut down their production due to the higher feed prices," it said.
Citing the Feed Industry Association Bangladesh (FIAB) and Bangladesh Poultry Industries Central Council (BPICC), the report said FIAB and BPICC contacts highlighted that the elevated prices of key feed ingredients contributed to the overall increase in feed prices.
"They also mentioned facing challenges in opening LCs for importing corn and soybean meal. Additionally, locally crushed soybean meal prices have reached a record high since August of this year. Collectively, these factors contribute to the high cost of feed production."