90,000 tonnes soybean floating in river ports, slow delivery raises oil supply fear

Highlights: TBS

Highlights:

• 56 lighter vessels with 90,000 tonnes of soybean seeds stranded at river ports
• The cargoes belong to multiple importers
• The hold-ups have contributed to a scarcity of raw materials for edible oil production, driving up prices.
• Importers denied any wrongdoing

Fifty-six lighter vessels laden with soybean seeds are stranded at river ports across Bangladesh, some for nearly a month, prompting concerns of an artificially induced crisis in the edible oil market. 

Data from the Bangladesh Water Transport Coordination Cell reveals that approximately 90,000 tonnes of soybean seeds are held up in these vessels, anchored at various points along the country's waterways.

The Coordination Cell, which coordinates lighter vessel allocations between shipowners, importers, exporters and agents, confirms the cargoes belong to multiple importers. However, industry insiders warn that the delays are exacerbating supply anxieties.

Some experts believe these hold-ups have contributed to a scarcity of raw materials for edible oil production, driving up prices. The Consumers Association of Bangladesh (CAB) has gone further, accusing businesses of deliberately using the vessels as "floating warehouses" to manipulate supply and inflate prices.

"Keeping lighter vessels filled with soybean seeds instead of unloading them has created an artificial shortage of soybean oil in the market," said SM Nazer Hossain, vice president of CAB. He urged authorities to take action against the alleged syndicates, particularly as it affects the Ramadan market.

Importers, however, deny any wrongdoing, dismissing claims that they are intentionally slowing the unloading process.

Biswas Group alone has 44 lighter vessels carrying soybean seeds.

Additionally, 12 vessels belonging to nearly half a dozen importers are also awaiting unloading at various ports, including Daudkandi, Tailab, Meghna and Patuakhali terminals.

The delays have also taken a financial toll on vessel operators. "If vessels operated normally, they would have earned transportation fares. Instead, each vessel is now incurring losses of Tk10-15 lakh due to being stuck," said Sayeed Mahmud, president of the Bangladesh Cargo Vessel Owners Association and convener of the Coordination Cell.

Under normal circumstances, goods loaded from mother vessels at Chattogram Port's outer anchorage should reach their destinations and be unloaded within a week.

Importers respond

Regarding the delays, Biswas Group Supervisor Md Rubel told The Business Standard, "In the last month, eight ships carrying our imported soybean seeds have arrived, with each carrying between 20,000 tonnes and 40,000 tonnes of goods. The Coordination Cell could not supply us with lighter vessels according to our demand to unload goods from these ships.

"When we asked for lighter vessels with a capacity of 3,000 tonnes, they allocated vessels with a capacity of 1,000 tonnes. As a result, a jam has been created at our ghat in Narayanganj, delaying the unloading process, even though the goods were supposed to be unloaded within three days to a week."

When contacted, TK Group Director (Corporate Affairs) Zafar Alam claimed he had no information about their soybean seeds being stuck on lighter vessels awaiting discharge.

Wider impact on the market

Beyond soybean seeds, 325 additional privately owned lighter vessels carrying wheat and pulses are also awaiting unloading, according to Bangladesh Cargo Vessel Owners Association General Secretary Mehbub Kabir.

"Some importers bring in goods even though they do not have their own warehouses. They keep these goods in lighter vessels. As a result, both the supply of goods and vessels are in crisis in the market," he said.

Between December and February, Bangladesh imported 304,000 tonnes of soybean seeds, which were transported promptly, according to Coordination Cell Executive Director Major (retd) GM Khan.

However, disruptions in unloading the currently stuck soybean seeds could impact supply chains.

Bangladesh relies on imports of both refined crude soybean oil and soybean seeds to meet market demand. About 20% of soybean seeds yield oil, while the remaining 80% is used for poultry, livestock, and fish feed.

Market analysts warn that prolonged vessel congestion could worsen commodity shortages and price volatility, particularly during the Eid season.