UN FAO hints of price hikes, fall in production; Bangladesh imported $1.1 billion worth of agricultural products from the US in 2018
One of the worst floods in recent history has resulted in record low planting of corn and soybean in the United States in five years, driving the Food and Agriculture Organization (FAO) to recalculate global food production estimates for 2019.
The UN agency says its cereal price index rose 1.4% because of a sudden surge in corn price quotations after planting of the crop got off to the slowest pace ever recorded in the United States, due to widespread flooding and rains.
The US being one of Bangladesh’s key source countries for agricultural imports, market sources cautioned the authorities to keep track of the global food and feed output scenario to avoid future price shocks or scarcity.
By June 2, producers had planted 67% of the US’s corn acreage, 29 percentage points behind both last year and the 5-year average, according to the Weekly Weather and Crop Bulletin published on June 4 by the United States Department of Agriculture (USDA).
USDA also reports that only 39% of the US’s soybean acreage was planted by June 2, 47 percentage points behind last year, and 40 points behind in the 5-year average.
Bangladesh’s import of agricultural products from the US was worth $1.1 billion last year. The imports include, among other things, soybeans ($434 million), soybean meal ($34 million) and distiller grains that include feed-grade maize ($35 million), according to the Office of the United States Trade Representative (USTR).
Though Bangladesh mostly imports soybean oil from Brazil and Argentina, some refineries also import US soybeans for crushing here in Bangladesh. The United States is the world’s number one soybean producing country.
Bangladesh’s domestic soybean production is only 0.15 million tons. The country needs to import over 1.1 million tons of soybeans and half a million tons of soymeal to keep pace with the growing needs of the cooking oil and feed industry respectively.
As far as maize or corn is concerned, despite its tremendous success in raising domestic output from next to zero in the 80’s to over 3.5 million tons now, Bangladesh still has to import over a million tons of maize/corn, mainly for feed purposes, thanks to a burgeoning poultry industry in the country.
Officials told the Dhaka Tribune yesterday that while maize is traditionally imported by Bangladesh from India and Thailand, it is being imported from the US as well since 2016.
Market sources said, even if Bangladesh gets alternate import sources for its soybean and maize, less planting and lower production of the two agricultural products in the United States, would have a bearing on overall availability and prices in the global market. The US is the world’s number one producer of both maize and soybean.
UN FAO predicts a fall in global maize output due to a minimum 10% shrinkage in US maize production due to a slower pace of planting owing to unfavourable weather conditions.
The UN agency said new estimates for production and utilization suggested world cereal stocks could decline by as much as 3% in the new season, hitting a four-year low of 830 million tons.
Any rise in maize and soymeal prices would have a bearing on Bangladesh’s fast growing poultry and fish industry.
Increased production of soybean and other cereal grains in Brazil and Argentina, sources said, can still potentially offset any global shortages of key agricultural products.