Raw material crisis brings Lakshmipur soy processing hub to its knees

Crisis of raw materials has brought the country's biggest soybean processing hub in Lakshmipur almost to a halt, leading some factories to lay off workers and some to the brink of closure.

Last year, out of one lakh tonnes of soybean produced in the country, some 90,000 tonnes were produced in the district alone, according to the district's agricultural office.

Known as  "soyland", the district also has seven factories, out of which five are in operation at the moment, where soybeans are processed for further use in products like poultry feed, fish feed, cattle feed etc.

In normal times, the factories produce around 1,000 tonnes of processed soybeans, also known as soymeal, per day.

But lately, soymeal production has taken a nosedive due to a shortage of raw soybeans and the combined production of the five factories has come down to around 300 tonnes per day, according to sources at the Lakshmipur BSCIC Industrial City.

The scarcity of raw soybeans has also caused the prices to skyrocket. Currently, each ton of local raw soybean is priced at Tk55,000 while imported soybean is priced at Tk59,000. Last year, the highest price for each ton of raw soybean was Tk35,000.

Due to the reduced production rate in the processing mills, the owners are having to lay off workers. Some factories are on the brink of shutting down themselves as the financial loss is too much for the owners to bear. The reduced production of processed soybeans has concurrently increased the price of products made from soymeal in the local market.

Hazi Nur Nabi Soybean Processing Mills, established in 2015, is one of the soybean processing factories in the district. Since its inception, the factory has been producing around 100 tonnes of processed soybean every day. Even last year when the production was affected due to the pandemic, the factory ended up producing at least 80 – 90 tonnes of soybean per day.

But since the last two months, the production has come to a standstill.

Md Sumon, managing director of the factory, said, the local soybean factories generally depend on both locally produced and imported raw soybeans for production.

"Since April this year, soybean imports have been halted and around August this year, even local soybean production went down, resulting in extreme scarcity," he added.

Md Noman, executive director of the factory, said, "Even though we have virtually no production, we are having to pay around Tk2.5 lakh per month for maintenance and just to keep the factory running."

Quality Soybean Processing Mill in the district's BSCIC Industrial City used to produce around 110 tons of soymeal.

"My factory has had no production in the last two months. Sometimes to make sure the machines keep functioning, we produce 10 – 20 tonnes but that is about it," said the owner of the factory Md Abdur Rahim.

He said he had to lay off 20 of his workers.

Rahim added that locally produced soybeans are hard to come by in the market now and some traders are stocking their products in the hope of selling them for a higher price in the future.

Two of the biggest soybean processing factories are situated in the Nasrin Agro Complex of Lakshmipur's Char Chamita area. The two factories generally produce more than 500 tonnes of processed soybeans per day. But recently, their production has come down to around 200 tonnes per day.

Hasnain Abdullah Nasir, assistant general manager of the factory, said Nasrin Agro Complex purchased around 30,000 tonnes of locally produced soybeans this year which lasted for two months. Later, the factories imported soybeans and currently, they are processing the imported soybeans.

Md Ismail, a soybean trader, said the soybean business is controlled by the trading agencies in Motijheel of the capital. The agencies purchase and store the raw soybeans and later send them to get processed in the processing mills. The processing mills send the processed soybeans back to the trading agencies and then the poultry and fish feed companies and other businesses buy soybeans from the agencies.

Many agencies also export processed soybeans abroad for more profit. Traders have argued that such exports cause the local industries that depend on processed soybeans to suffer.

It must be appended here that to curb the rising prices of soybean meal and bring order to the local market, the government imposed a ban on exporting soybean meal on 21 October. Later, the Ministry of Commerce extended the export date for soybean meal till 31 October as some 500 trucks worth of soymeal got stuck at the Benapole Land Port in Jashore on their way to India.