Local firms are gradually expanding their oilseed crushing capacities, not just to get more oil but to also cater to a growing demand for soybean meals among feed manufacturers, industry leaders said.

Two big commodity importers and processors -- City Group and Meghna Group of Industries (MGI) – have enlarged their abilities over threefold in the past one year.

Another major commodity trader, TK Group of Industries, is building facilities to foray into the annual soybean meal market of roughly 15 lakh tonnes for the making of poultry, fish and animal feed by dedicated mills.

"We expect to start crushing in our mills by June," said its director for finance, Md Shafiul Ather Taslim.

It is the fourth firm to adopt the mashing operations to retain competitiveness in the soybean oil market through the resulting cut in production cost.

At the same time, there is also a market for soybean meals, he said. The TK mill will have a daily seed pressing capacity of 2,500 tonnes.

This will take the combined ability of local mills to 18,500 tonnes, according to industry operators.

Earlier in October last year, City Group enlarged their proportion to 7,000 tonnes from 2,000 tonnes.

The MGI augmented to 5,500 tonnes earlier this year from its previous 2,500 tonnes.

The US Department of Agriculture (USDA) in its latest report on oilseeds said four countries, including Bangladesh and Pakistan, either took to squeezing soybean or expanding capacities in the past 15 years.

As a result, Bangladesh's oilseed imports jumped to 30 lakh tonnes in fiscal 2019-20 from nearly 10,000 tonnes three years ago, USDA data shows.

"This has reduced imports of soybean meal," said Mostafa Kamal, chairman and managing director of MGI. He said the entry of more mills into the business would create jobs.

Bangladesh imports most of its requirement of oilseeds, such as soybean, as local production is insignificant.

This gives further lift to soaring imports.

In the past 10 months to October this year, oilseed imports soared 36 per cent year-on-year to 26.81 lakh tonnes, shows data from the Bangladesh Bureau of Statistics.

Biswajit Saha, director, corporate and regulatory affairs of City Group, said the increase in imports was a result of the expansion of crushing abilities to derive soybean and sunflower oils apart from supplying soybean meals.

"Consumption of soybean oil has increased," he said, adding that soybean oil accounts for a third of the annual consumption of edible oil in the country.

"The market for soybean meal is also growing gradually," he said, adding that the daily demand for the feed ingredient was 13,000 tonnes.

Saha also said that local mills now face increased competition from imported soybean meals as no duty was levied.

He demanded it be imposed to protect local seed crushing mills.

Md Ahsanuzzaman, general secretary of the Feed Industries Association of Bangladesh, said the entry of more players should increase competition in the soybean meal market, which stands at around 15-20 lakh tonnes annually.

At the same, the import benefit for both soybean and its associated meals should continue to ensure that feed makers get their ingredients at a competitive rate, he said.