Soybean rots in warehouses with no buyers, prices hitting 10-yr low

Throughout April, farmers are typically busy harvesting the new soybean crop. Ahead of the peak season, many of them are experiencing financial distress, with the market price for last season's dried soybeans remaining unusually low.

Small traders are selling soybeans at a loss while feed mill owners are purchasing them at Tk20-25 less per kilogram than their original cost. Despite the price drop, there are still not enough buyers in the market. Moreover, mill owners are delaying payments to small traders, causing soybeans to rot in warehouses.

While talking to several traders and farmers recently (22 March), they expressed their concerns, noting that soybean prices haven't fallen this low in over a decade. The significant price decline has put both farmers and traders at serious financial risk. 

With the ongoing price slump, many farmers are feeling uncertain and discouraged as they prepare for the next planting season.

Small traders face losses amid price drop

Milon Bhandari, a businessman from Motirhat, Lakshmipur, who has been in the soybean business for over 12 years, is losing substantial amounts. Last season, he bought 100 tonnes of soybeans at Tk60 per kilogram, but now mill owners are offering Tk20-25 less per kilogram. This has resulted in a loss of Tk20,000 -25,000 per tonne, alongside other expenses and loans, pushing him into significant financial hardship.

Kashim Mia, owner of Kashim Traders, also faces a similar situation, with his warehouse holding around 1,000 tonnes of soybeans. He is losing Tk25,000 -30,000 per tonne, leading to total losses nearing Tk1 crore. The stress of this financial strain recently caused him to suffer a stroke.

Syndicate behavior of millers blamed

Abdul Malek, a small trader from Char Ramani Mohan, said, "We usually buy soybeans from farmers and sell them to mill owners throughout the year. However, the mill owners have formed a syndicate and stopped purchasing from us. Ultimately, this will impact farmers at the start of the season." 

He warned that if the situation persists, soybean production in the country could decline.

Farmers from the Meghna River char, including Md Kiran, M Al Amin, and Moktar Hossain Mukta, also shared their struggles. They pointed out that last season, soybeans were sold at Tk60 per kilogram, but this year, traders who bought them at that price are unable to sell them even at Tk40 per kilogram. 

If small traders face losses, the impact will inevitably fall on us farmers, they said.

Local soybean price drop linked to imports

Md Noman Hossain, a soybean processing mill owner, explained that feed companies are importing processed soybeans at lower prices, which has led to a 40-45% drop in the price of local soybeans. "As a result, farmers will face huge losses, which may lead them to stop soybean production altogether," he warned.

Md Ismail Hossain, another trader, noted that international prices of soybean seeds have dropped, leading large companies to import them. However, this has not led to lower costs for local feed, which could further discourage farmers from growing soybeans.

With at least 10,000 tonnes of unsold soybeans currently awaiting buyers in Lakshmipur, the Department of Agricultural Extension reported that soybean is being grown on 43,000 hectares this season, with a target production of 88,000 tonnes. 

The Agricultural Yearbook 2023 reports that Lakshmipur accounts for 77% of Bangladesh's total soybean production. Four of the district's five upazilas are heavily involved in large-scale soybean cultivation, with nearly 100,000 farmers engaged in its production.