Industry Analysis on Soybean Oil

Industry Analysis on Soybean oil

Course Name: Strategic Management

Course Code: MGT 480

Section: 02

Course Instructor:
Jashim Uddin, PhD
Associate Professor
Department of Business Administration
East West University

Prepared by:
Department of Business Administration
East West University
Name Student ID
Shurovi Akter Urmi 2019-1-10-037
Abida Shahana Shoshe 2019-1-10-107
Saima Khan Mamo 2019-1-10-294
Maktuma Alam 2019-1-10-296

Date of Submission: August 30, 2022

i
Letter of Transmittal
Date: August 30, 2022

Jashim Uddin
Associate Professor
Department of Business Administration
East West University
Dhaka.
Subject: Submission of the Term Paper on “Industry Analysis on Soybean oil”
Dear Sir,
It is a great pleasure to present the term paper on “Industry Analysis on Soybean oil” which was
assigned to us as learning for Strategic Management course.
It is our honor to do this term paper and gain knowledge from it. We have tried our best of us
capacity to accommodate as much information and relevant issues as possible and tried to
follow
the instruction as you have suggested. We tried our best make this term paper as much
informative
as possible.
We are grateful to your guidance and kind cooperation at every step of our effort on this term
paper. We will remain deeply grateful if you go through the term paper.

Sincerely yours,
Shurovi Akter Urmi

2019-1-10-037

On behalf of the group

ii
Acknowledgement

Alhamdulillah, all praises to Allah for the strengths and his blessings in completing this term
paper.Without His graciousness, it could not be possible to collect all the resources.

We would like to thank our course instructor Jashim Uddin (Associate Professor, Department
of Business Administration, East West University). For his inspiration, kind assistance,
valuable suggestions, wise guidance during the entire phase of the study made it easy for us to
prepare this term paper. Without his supervision and instructions, this would not come out to
the light. We are grateful to our family and classmates without the support of whom this
project could never exist.

iii
 Executive Summary
The purpose of this study is to analyze the soybean oil industry of Bangladesh. This report is
divided into six chapters. The first chapter focuses on the introduction of Soybean oil industry
that includes the objectives, methodology and limitations of this report. The second chapter is
on industry and literature overview. In the third chapter, we have discussed about the Porter’s
Five Forces Model, sixth force, Industry parameters, short term, and long-term challenges of
Soyabean industry, PESTEL Analysis, benefits of customer satisfaction, values the competitors
are providing, what competitors missing out and SWOT Analysis. In the fourth chapter, we
have written down the summary of the whole report. The fifth and sixth chapter contains
findings and recommendations respectively. Finally, the seventh and last part of the report
includes the conclusion of the report.

iv
 Table of Contents

1. Introduction...................................................................................................... 1
1.1 Origin of the Study .............................................................................................................1
1.2 Objective of the Study ........................................................................................................1
1.3 Scope of the Study...............................................................................................................2
1.4 Limitations of the study ......................................................................................................2
1.5 Methodology of the Study...................................................................................................2

2.0 Industry Overview .........................................................................................................3

2.1 Literature Review………………………………………………………………………….5
3.0: Discussions…………………………………………………………………………….6
3.1. Porter's Five Power Analysis…………………………………………………………….6

3.2 Analyzing Industry Parameters………………………………………………………...… 9

3.3 Controllable and Uncontrollable Factors of Soyabean Industry…………………….……14

3.4 Customer Satisfaction………………………………………………………………….…18
3.5 Forecast………………………………………………………………………………..… 21
3.6 SWOT Analysis………………………………………………………………………..…22
4.0 Summary……………………………………………………………………………….…23
5.0 Findings………………………………………………………………………………...…23
6.0 Recommendation…………………………………………………………………………24
7.0 Conclusion………………………………………………………………………………..24
8.0 References……………………………………………………………………………….. 24

v
1.0: Introduction

By predicting the future and changes in the

market, analyzing the dangers and opportunities
in the near future, and making decisions and
preparing appropriately, industry analysis helps
the industry thrive, survive in a competitive
environment, and achieve a competitive edge.
Understanding one’s unique characteristics from
those of one’s industry competitors and utilizing
them to the greatest advantage is the key to
thriving in this dynamic business market (CFI,
2018). There are three crucial and widely utilized approaches for conducting industry analysis.
Competitive Forces Model (Porter's 5 Forces), Broad Factors Analysis (PEST Analysis), and
SWOT Analysis are the three techniques.

1.1Origin of the Study

The purpose of this term paper is to examine the entire Soybean Industry and how it works. In
addition, we'll discuss the data on demand and supply, level of industry competition, industry's
competitiveness with other emerging industries, industry's future prospects in light of technical
advancements, industry's credit system, and industry's exposure to outside influences. We will
determine where the company sits in relation to the industry average by comparing the ratio for
Soybean companies over the previous five years.

1.2 Objective of the Study

The objective of this report is to learn more about the Soyabean oil Industry thoroughly. Our
course instructor taught us many important concepts of industry analysis, and other things as
well, and through this report, we were able to learn more about it in a real life.
The fundamental goal of the report is to understand how to put the theories learned in class into
practice by experiencing them in real life. Other goals include:
 Let us enlighten about how Soyabean Oil Industry works.
 Determining how top level or CEO makes the decision.
 Determine the intensity of rivalry among existing competitors.
 Determine the factors that are responsible for future demand and supply in the market.
 Identify the key supply drivers.

1.3 Scope of the Study

We are recommended to obtain information from papers and books for this work because this
analysis aids in our thinking about the " Soyabean Oil Industry." It gives us a clear
understanding of the reasons we are taking the test and enrolling in the course. Future

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specialists who need to gather information or think about the fundamental Soyabean oil
Industry may find this examination useful.

1.4 Limitations of the Study

While preparing the report, we encountered some problems and restrictions, like with any other
endeavor, but we worked hard to overcome them and make this report as close to ideal as
possible within our capabilities. Our primary limitation with this report was that we were unable
to visit workplaces due to our academic hectic schedule. If we had been able to visit the
industry sites, we would have been able to learn more about the report. Other restrictions
include outdated company information, a lack of knowledge, and a time constraint that made
preparing the report difficult. So, the overall outcome of data analysis may not be fully flawless.
1.5 Methodology of the Study

To conduct an effective study, an authentic and properly designed methodology with an

accurate Framework is a must. The design is focused on the framework or the blueprint of the
study to collect information, analyze, and create a conclusion. Collecting useful data is a vital
task for any research. Here in this research, we have collected data by using only secondary
sources.
 Secondary Data: It refers to data that is collected by someone other than the user.
Common sources of secondary data are the internet, different magazines, and data that
was originally collected for other research purposes. Such data are cheaper and more
quickly obtainable than the Primary data and may be available when primary data
cannot be obtained at all. In this Research, we have collected the secondary data from:
 Newspapers
 Journals
 Other relevant research papers
 Websites
 Project papers

2.0 Industry Overview

Bangladesh is one of the wealthiest nations in Asia and is projected to have the world's 26th
largest GDP by 2030. Bangladesh's GDP per capita increased from USD 1,960 in 2020 to USD
2,130 in 2021 despite the epidemic, whereas neighboring countries' GDP growth rates were on
the decline. Due to this, the country's expenditure per person jumped from USD 1,470 in 2020
to USD 1,600 in 2021. Regularly consumed goods like edible oil and protein saw an increase as
more individuals were able to purchase better quality food. Regularly consumed goods like
edible oil and protein saw an increase as more individuals were able to purchase better quality
food. Based on the HIES 2016 statistics, it was predicted that by 2020, the average annual
protein consumption per person would be 37 kg, and that it would increase at a CAGR of 2.07
percent over the following five years. Similar to that, the consumption of main edible oils in the
area of edible oils is currently at 2.7 million tonnes and is anticipated to be about 3.65 million
tonnes by 2025. There has been an increasing trend among oil refineries in recent years to get
involved in the soy crushing industry. Recently, large conglomerates like City Group and
Meghna Group increased their daily capabilities for crushing soybeans to 7,000 metric tonnes
and 5,500 metric tonnes, respectively. The total amount of soybean seeds imported in 2020 is
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an indication of this trend. Due to the expanding capacity and demand from the major crush
players in the sector, the import of soybean seeds increased by 92% over the course of a year,
from 1.3 million metric tonnes to 2.5 million metric tonnes (LightCastle Partners, 2022).

This increased interest in the soy crushing industry is a result of the fact that soybean seeds can
be crushed to produce two main byproducts: crude oil and soy meal, a key component of animal
feed. As a result, the soy crush serves two distinct markets: oil and feed. The washing and
dehulling of soybean seeds, solvent extraction, and meal treatment can be seen as the three main
processes in the soybean crushing process. To create meals with a low protein level (42–43%),
the seeds are first dehulled, then the hulls are heated and pulverized. People desire to use
healthier food ingredients, such as switching from palm oil to soybean oil, because of greater
livability brought on by higher disposable income. But the demand for palm oil has increased in
the Vanaspati and food processing industries as well as the HORECA sector, making it popular
with people of lower-middle class due to its price competitiveness (hotels, restaurants, cafes).
As soybean oil consumption rises, it is anticipated that, over the next five years, imports of
crude degummed soybean oil (CDSBO), which is refined to produce edible oil, will decline as
more soybean seeds are imported for the crushing industry and as locally produced crushed
soybean oil is less expensive than imported crude degummed soybean oil.

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The pandemic has caused supply chain disruptions in the global soybean market, which have
rendered the markets for its byproducts (oil and meal) and the overall crushing industry volatile.
While many countries have experienced business closures, logistical difficulties, and trade
restrictions, China's overall agricultural imports from the USA increased by 91 percent in 2020
compared to the previous year, with the import of soybeans increasing by 77 percent during that
time. The price of soybeans, soybean oil, and soybean meal has increased due to this intense
concentration, both on the domestic and international markets (Express, n.d.).

As a result of the coronavirus pandemic, soybean oil, the most popular cooking oil, has seen a
new price increase in the last week. This is a significant blow to already battered customers.
From Tk 140-141, which the refiners established as the price per liter on May 3 of last year, the
price of soybean oil in bottles increased to Tk 144. In bottles, Bangladesh Edible Oil Ltd.'s
(BOEL) Rupchanda brand soybean oil was being sold for Tk 144 per liter. Priced at Tk 286 for
a two-liter jar. Even though prices have skyrocketed on the international market, refiners stated
they would shortly evaluate the rates once more in collaboration with the government. To help
consumers suffering from pandemic-related hardship, market experts proposed removing all
types of taxes on imports of crude edible oil for a set length of time (Express, n.d.). The major
players in the packed oil market are as follows:
Name of the Brand Market Share
Teer 35%
Rupchanda 33%
Fresh 24%
Pusti 3%
Bashundhara 2%
Others 3%

2.1 Literature Review

 In Bangladesh, there is a roughly 15.09 lac MT demand for edible oil. 9.70 kg of
consumption per person annually has been used as the foundation for the estimate.
Refiners largely provide the need. There should be more local seed production. Rice
Bran Oil production began in 2011 and has since given rise to fifteen (15) other
enterprises across the nation. Due to population growth, the demand for edible oil would
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 increase to 24.91 lac MT in 2021. If rice plant (Paddy) bran is sufficiently supplied, it
should be possible for rice bran oil to satisfy 30.59% of the demand in 2021. Based on
discussions of the production process, import, export, and production capacity of the
industries, recommendations have been made, such as restricting crude import to
refiners only, utilizing the full capacity, increasing seed supply and HYV seed
production, converting all manual rice mills to semi-automatic and automatic mills
(introducing Rubber Roll Huller Mill in place of Angle Burg Huller Mill), utilizing all
Rice Bran, imposing VAT on one stage of the refining process, and other things. The
Bangladesh Tariff Commission produced a comprehensive report titled "An Analysis of
Assistance to Edible Oil Manufacturing Industry and Examining Export Possibilities" in
December 2014. This is a revised short version of that report (btc.portal.gov.bd, n.d.).
 It has reached an intolerable level where the price of edible oil has been steadily rising
each day. Even though there seems to be a sufficient supply of edible oil in our
neighborhood market, the price hike is unwanted and unpleasant. Market demand has an
ongoing impact on edible oil's pricing. Although the government has set a price for
open-market edible oil to regulate the problem, both the wholesale and retail markets
continue to see rising prices for the commodity. The price of edible oil is at its highest
point in the past ten years, according to a newspaper source. Open edible oil is
becoming more expensive every week on the market. According to the dealers, the price
of edible oil has increased both domestically and internationally as a result of rising
market prices. They further assert that the coronavirus outbreak has caused a drop in the
supply of edible oil on the global market. They believe that this year, due to China's
large purchases of edible oil, the price of edible oil has increased on the global market.
However, according to analysts, the price of edible oil won't be reduced unless the
government immediately takes significant measures. However, according to analysts,
the price of edible oil won't be reduced unless the government immediately takes
significant measures. Experts believe that by lowering VAT and tax, the price of edible
oil can be maintained in check (Rising edible oil prices: Quick action is needed |
theindependentbd.com, n.d.).
 With a focus on competition, this study aims to examine how prices are set in the global
soybean oil market. Using a structural simultaneous equations model, it is possible to
identify the factors that affect the price of soybean oil globally by estimating the
equations for exports/imports and the border prices of the key exporting and importing
nations. According to the study's findings, the price of substitute palm oil globally as
well as the volume of soybean oil exports on the global market are the two main factors
influencing the price of soybean oil globally. The widening supply-demand gap (caused
by rising consumption and falling production in the major exporting nations) and the
likelihood of a drop in the price of palm oil globally (as a result of an uptick in palm oil
production) are likely to have a negative impact on both soybean oil exports and prices
globally. The probable decline in the price of palm oil around the world is anticipated to
lead to substantially greater imports of palm oil into India in the future, which could
have an impact on the livelihood security of soy farmers in the country's arid regions
(SEKHAR, 2008).
 The Bangladesh Competition Commission, which is in charge of promoting market
competition, has filed lawsuits against eight edible oil companies on the grounds that
they have restricted or controlled manufacture, distribution, market technical
advancement, and investments. City Edible Oil Limited, Bangladesh Edible Oil Limited,
Meghna and United Edible Oil Refinery Limited, Bashundhara Oil Refinery Mill,
Shabnam Vegetable Oil Industries Limited, S Alam Super Edible Oil Company Limited,
Prime Edible Oil Limited, and Globe Edible Oil Limited are the companies in question.
Former senior secretary to the commerce ministry and chairman of the Bangladesh
Competition Commission Mofizur Rahman informed the Bangla Tribune that the
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 commission would take action against the corporations after the hearings in accordance
with its policies. According to the Competition Act, a fine of between 1% and 10% of
the organization's sales or transactions over the previous three years may be imposed if
an organization is found guilty (www.dhakatribune.com, 2022).

3.0: Discussions
3.1. Porter's Five Power Analysis

According to Porter's Five Forces Model, there are five factors that might affect what happens
in every industry:
1. Existing and Potential New Companies
2. Buyers
3. Substitutes for Products Offered
4. Suppliers
5. Customers
Through the Porter's Five Forces Analysis, which considers supplier power, buyer power,
entrance threat, substitution threat, and rivalry, the degree of competition in the soybean oil
market in Bangladesh can be observed. In order to study the competitive circumstances in a
sector, it is necessary to include five forces, according to Michael Porter's Five Power Analysis
(Porter, 1998). It would take a lot of investigation and consultation with industry experts, rivals,
and customers to do a complete industry study. idea offers business owners a great tool for
assessing an industry's earnings potential. You can employ strategies to weaken the effect of the
factors if you comprehend how each of the five forces affects your profitability (Oraman,
Unakitan, Hurma,2018).

Threat of new
entrants

Rivalry
Bargaining among Bargaining
power of existing power of Buyers
Suppliers competitors

Threat of 6|Page
substitute products
Threat of New Entrants: In general, firms joining the food sector benefit from higher asset
turnover than other areas. Threats posed by businesses with new entry potential in the sector,
the soybean oil sector is a labor-intensive sector, countries play an important role in the
industrialization process, and the lack of any entry barriers in front of potential competitors who
want to enter this sector for the first time has resulted in an increase in the number of newly
entering enterprises and competitor countries in recent years. Any new entrant will have a lower
volume of production than the established companies Teer and Rupchanda. Newcomers have a
higher bargaining cost than existing companies. If they wish to keep their bargaining costs high,
they must sell their products for less than the price of Teer and Rupchanda oil. If the price of
Teer and Rupchanda oil is 106 & 110 TK, then new entrants must establish a price lower than
the present brand. Greater capital needs are required in the soybean oil business, which reduces
the possibility of new competitors. Current distribution channels may make it difficult for a new
company to obtain inputs as easily as an old one. Product diversification in the soybean oil
sector is limited since all basic components in oil are similar. There is a cost-effective level of
manufacturing for every product. If challengers are unable to meet that level of output, they will
not be competitive and will thus not enter the sector. In Bangladesh government policy is not
strict so in this aspect threat of new entrants are high in soybean oil industry.
Bargaining Power of Suppliers: The soybean oil processor is depended on major raw materials
oilseeds which are the critical goods to the buyer’s marketplace success. In Bangladesh,
soybean oil industries are quite large but few in numbers. In Bangladesh, oil imported from
others country because industries cannot supply oil as per demand. In soybean oil industry
suitable substitute products are not available because substitute product of soybean oil is costly
than soybean oil which is not suitable for customers. Individual buyers like hostels, restaurants,
hotels are not large customers of soybean oil industries but there are many of them in
Bangladesh. Soybean oil suppliers create high switching cost because others suppliers may
create high cost for critical goods or not give good raw materials. It is relatively not easy to
switch to substitute products. Here suppliers pose a threat to integrate forward into buyers’
industry can be high because who supply soybean seeds to the buyers can be start own soybean
oil business if buyers create any problem.
Bargaining Power of Buyers: Buyer power is determined by the layout of market channels as
well as the nature of the product. Buyers are many in the soybean oil sector. Buyer power grows
in this buyer group, which includes hostels, hotels, and restaurants that acquire a big share of an
industry's overall production for culinary reasons. Customers in the soybean oil industry find it
difficult to transition since alternative substitute goods are more expensive than soybean oil,
and other brands such as Pusti, Bashundhara, and others are of worse quality than Teer and
Rupchanda. As a result of the greater switching cost, purchasers' negotiating power is limited.
Buyers are less likely to integrate backward into the seller's business in this sector since
consumers are less likely to enter the soybean oil industry because of high fixed cost.
Threat of substitute products: Soybean oil substitutes include olive oil, mustard oil, palm oil,
and butter. There is no significant substitute property threat for the soybean oil sector because
of higher price of substitute products than soybean oil. Substitute goods have superior quality
and performance than soybean oil, but customers are unwilling to move because of the higher
price, which benefits the soybean oil sector. Buyers incur significant switching costs in this
situation, which reduces the danger of competing items. However, new soybean oil goods may
acquire additional replacement products for present soybean oil products, reducing demand and
lowering the price of soybean oil.
Intensity of rivalry among existing competitors: According to the present competitive structure
of the industry in which the operator works, Bangladesh has a number of soybean oil producing
facilities. Food and industrial applications are driving the demand for soybean oil. There have

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long been nine major food refining businesses working in the field. T.K. Group, City Group,
and Meghna Group were the largest players, holding over 60% of the country's entire oils and
fats market. Among the rest, Bangladesh Edible Co Ltd.'s yearly import amount, while not
considerable in comparison to the aforementioned three categories, has long led in terms of
brand value. In truth, our country imports a significant amount of oil from a variety of
countries. There are few competitors in the soybean oil sector. If we look at the soybean oil
market, Teer, Rupchanda, and Fresh have almost similar market shares, whereas Pusti,
Bashundhara, and other companies have significantly smaller market shares. Teer and
Rupchanda soybean oil are fierce competitors. Teer and Rupchanda soybean oil have 35% and
33% market shares, respectively. Teer and Rupchanda are equally balanced competitors.
People purchases Teer soybean oil more because of quality with affordable price than
competitors. Teer soybean oil is the rivalry industry among the existing competitors. Nowadays,
soybean oil price is high so their fixed cost also high companies must sell more products to
cover these high costs. In soybean oil sector industry rivalry increase because of there are high
storage cost. In soybean oil industry they can store for long-time and can sell at best time. High
storage costs result in a situation where firms must sell the product as soon as possible,
increasing rivalry among firms. In soybean oil that produce oil that are very similar will mostly
compete on price, so the rivalry is expected to be high. Competitors cannot easily abandon their
product because of exit costs are high they may remain in business even if it is not profitable. In
soybean oil, people who use Teer & Rupchanda their switching cost is high because of brand
loyalty they don’t want to switch any other brand.
Teer is popular among the people of the country, and there is a high demand for them. Teer
positioning for their soybean oil by maintaining adequate amount while being more inexpensive
than competitors. They refine the oil using their own cutting-edge machinery. They distribute
soybean oil through their current distribution route, with the goal of supplying the right product
at the right place at the right time. Teer pushed several types of commercials, which resulted in
an improvement in the company's brand scenario. A product is introduced to the market through
efficient advertising and will yield a good return. Teer has a large distribution network and has
been able to expand its products throughout all districts with the support of this network.
Rupchanda is also well-known throughout the country for its soybean oil. Rupchanda mostly
sells its goods in PET bottles. It also sells polypacks of its items. The oil has a dark appearance.
Rupchanda purposefully maintains the oil's hue black since many buyers consider it an
indication of quality. This tint also distinguishes Rupchanda oil from its competitors' goods,
while other companies' oil seems lighter.
Complementors of soybean oil: Soybean oil industry also increasing the number of
complementors and producing attractive complementary products such as chicken, fish,
potatoes, onion, chilies and others which type of food are high-heat cooking like roasting,
baking and frying. This type of food demand also increasing for soybean oil and profits in the
industry can broaden opportunities for creating value. Soybean oil sector complementors are
supportive and also producing attractive complementary products. In Bangladesh, use oil in
kind of all cooking items which is advantages for soybean oil sector which also increases
industry growth and profitability.

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Interpreting Industry Analysis:

Supportive
Complementary

Moderate entry
barriers

Attractive
Suppliers and
buyers have Industry
moderate
position

Few threats from

substitute
products

Moderate rivalry
among competitors

Above diagram is for interpreting the industry analysis. After analysis the level of competition
in soybean oil industry through the porter’s Five Forces Analysis we are now identifying the
industry attractiveness and unattractiveness. After analysis we find out that our soybean oil
industry is attractive which is high profit potential. In soybean oil industry we analyze that their
complementary products are supportive for increasing industry growth and profitability. Their
entry barriers also moderate level which is attractive for industry. Soybean oil suppliers have
moderate level of strong in their position but buyers are not that much strong because of their
switching cost high and low threat to integrate backward into the industry. There has no
significant threat from substitute because of higher cost than soybean oil. In soybean oil
industry have moderate level of rivalry among the competitors because of high fixed cost and
equally balanced competitors and their industry growth also maturity level. Soybean oil rivalry
is complete against few competitors. So, after all these analyses we predict that soybean oil
industry is an attractive industry.

3.2 Analyzing Industry Parameters

The industry parameters of soybean oil are explaining below:

1. Demand
In Bangladesh, the major use of soybean oil are food application and industrial use. Soybean oil
is one of the most-consumed vegetable oil in Bangladesh as its price is lower than some other
vegetable oil like mustard oil, sunflower oil, and olive oil. So, there is always a continuous
demand for soybean oil in Bangladesh (Future Market Insights, 2022).

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 Soybean Oil
Year Growth Rate
Consumption

2016 1006
28.23%
2021 1290
(Index Mundi,2022)
Growth Rate of Soybean Oil Consumption from 2016-
2021

In the above graph, we can see that from 2016 to 2021 the growth rate of the consumption of
soybean oil has increased by 28.23%. The rise in population and per capita income has led to
the growth of soybean oil consumption in Bangladesh.

2. Key supply drivers

Soybean is the major component of soybean oil. The price of soybean and the production cost
of soybean make great impact on the supply of soybean (Beroeinc,2022). Besides, at the time of
extraction process, hexane or other solvents need to wash the soybean oil from the prepared
soybean flake. Therefore, the price of hexane or other solvents is also key supply driver of
soyabean oil industry.

3. Degree or Nature of change

Generally, the soybean oil industry responds slowly to the new technological developments.
Nowadays, many companies are now heavily investing on big data and analytics because of
digitalization. Using digitalized system is increasing the efficiencies of their operations and
generating more sales (How & What, 2022). However, the changes in technology do not occur
frequently. Therefore, the degree or nature of change is moderate.

4. Predictability of business
The predictability of business is low to medium. In august 2022, the price of soybean oil has
increased by a record amount; it was the biggest increase in Bangladesh's history. The price of a
liter of bottled soybean oil has fixed at Tk 198, a 23.75% hike from Tk 160 per liter.
Bangladesh must depend on the other country to meet the demand of soybean oil. The supply of
soybean oil suffered major hiccups after Russia's invasion of Ukraine. But the situation became
worse when Indonesia, the biggest shipper of edible oil, imposed a ban on palm oil exports to
protect its domestic market. Due to the shortage of palm oil the demand for soybean oil
increased (The Daily Star, 2022). In 2019, the import amount of soybean oil was 690000 MT
which decreased by 4.35% in 2020 due to Covid-19 crisis. It is not easy to predict the economic
and political instability of the world. Therefore, the soybean oil market of Bangladesh is
volatile.

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 5. Cyclicality
Cyclical firms are highly dependent on the strength of the overall economy. In the cyclical
industry, revenues generally are higher at the time of economic prosperity and expansion and
are lower at the time of economic downturn (Kenton, 2020).

Industrial Applications of
Soybean Oil
Food based Applications Non-food based applications

3%

97%

(Latheef, 2021)
In the above pie-chart we can see that 97% of soybean oil is used for food-based applications
and only 3% used for non-food-based applications like resins and plastic, paint and varnish and
other non-food uses.

Domestic Consumption of Soybean Oil

(1000MT)
Domestic Consumption of Soybean Oil

1290
1240
1214
1170

1085

2017 2018 2019 2020 2021

(Index Mundi,2022)
The above graph shows the movement domestic consumption of soybean oil. The graph follows
upward trend. In 2020, the COVID-19 pandemic has caused the largest economic crisis that the
world has seen for many decades. However, the consumption of soybean oil has increased from
2019 to 2020.
In Bangladesh, people use soybean oil mostly as food-based applications. Even if there is
economic instability, the demand for soybean oil does not decline as while preparing food,
people must need cooking oil. Therefore, we can say that cyclicality is low for soybean oil
industry.
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 5. Ability to increase price ahead of inflation (Pricing power)
The ability to increase price ahead of inflation is moderate. Bangladesh imported $461M in
Soybean Oil in 2020 and become the 4th largest importer of Soybean Oil in the world.
Bangladesh imports Soybean Oil mainly from Argentina, Brazil, Paraguay, Turkey, and Saudi
Arabia. For the supply of soybean oil Bangladesh must depend on those countries (OEC,2022).
If there is any political instability, economics crisis in those countries, the supply of the soybean
may fall. Due to the shortage of supply, the price of soybean oil may increase ahead of
inflation.
Besides, Syndicate traders may also create an artificial crisis of soybean oil which will also lead
to increase price ahead of inflation.

6. Market Structure
An oligopoly indicates a market structure in which an industry is dominated by a small
number of large sellers or producers. The industry of soybean oil in Bangladesh is
oligopoly.

Market Share of Major Players

2% 3%
3%

35%
24%

33%

Teer Rupchanda Fresh

Pusti Bashundhara Others
(Prodhan, Rahman, 2021)
In the above chart we can see that the market share of Teer, Rupchanda, Fresh is 35%, 34% and
24% respectively. They combinedly capture 92% of the market share. Remaining 8% is
captured by Pusti, Bashundhara and others.
The soybean oil industry of Bangladesh is controlled by few companies, and they create high
barriers to entry and have pricing power.
7. Recurring Revenue Stream
Recurring revenue refers to the revenue generated through ongoing payments for continuing
services or after-sale services to customers (CFI,2022). Soybean oil industry generally do not
have a recurring revenue stream through service or support contracts. It can be generated
recurring revenue through customer loyalty. Established soybean oil brand like Teer,
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Rupchanda, Fresh have a loyal base of customers that are very likely to keep purchasing their
products (Investopedia, 2022).

8. If the business has franchise or brands, or it is a commodity?

Soybean oil is an agricultural commodity. Most of the people in Bangladesh prefer Teer,
Rupchanda, Fresh and these three brands capture more than 90% of the market share. In case of
soybean oil though the franchise and branding are not strong, people sometimes do not want to
switch the brand due to personal feelings and judgement (Prodhan, Rahman, 2021).

9. High Growth Rates

Presently, soybean industry has a much steadier trend in Bangladesh. However, the demand of
soybean oil has increased in global soybean market due to the recovery in biodiesel demand.
Many countries have started to utilize soybean oil to produce environment friendly renewable
fuel. Currently, Bangladesh do not produce any biodiesel but if the industry will start to produce
biodiesel, then definitely the industry will enjoy high growth (Index Mundi,2022).

Briefly, the analysis of the industry parameters is given below:

Industry Parameters Soybean Sector

There would be a continuous demand for

soybean oil as it is used food application
Demand: Why would there be a continued and industrial use.
demand for the product/service Soybean oil consumption has increased
due to rise in capital and per capita
income.

Key supply drivers Price of soybean and solvents.

Degree/nature of change Moderate.

Low to medium due to dependency on the

Predictability of business importing country, global political and
economic crisis.

Cyclicality Low.

Ability to increase price ahead of inflation

Moderate.
(Pricing power)

Some sort of monopoly or Oligopoly Oligopoly

Does the company have a recurring Yes

revenue stream? Through customer loyalty.
Does the business have franchise/brands, Agricultural commodity
or is it a commodity? Weak to moderate brand and franchise.

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 Does the industry enjoy high growth
Steadier trend.
rates? For how long

3.3 Controllable and Uncontrollable Factors of Soyabean Industry

Controllable Factors:
It often called as “Marketing Mix”.
It includes 4P.
1.Product
2.Price
3.Place
4.Promotion

Uncontrollable Factors:
PESTEL Analysis mainly talk about the macro factor of an industry. Such as
1.Political-legal dimension
The general environment's political-legal dimension relates to government regulation of
business and the connection between government and business. We can also say that the
political-legal environment is a combination of many factors, such as the current political party
in power, the degree of politicization of trade and industry, the current government's efficiency,
government policies, the current legal framework, public opinion on the economy, and so on.
The factors which have a significant impact on Cake and Soyabean are:
1.1 VAT Policy:
Value-added tax (VAT) is a consumption tax on goods and services that is levied at each stage
of the supply chain where value is added, from initial production to the point of sale. The
amount of VAT the user pays is based on the cost of the product minus any costs of materials in
the product that have already been taxed at a previous stage.
There is no import-tax benefit for refined soybean and palm oil. A number of supplier countries
of soybean have increased export duty on crude soybean oil following supply shortage.
Currently, total tax incidence on refined and crude olive oil is 37%, and olive oil wrapped or
canned 58.60%
1.2 Labor Law:
The 2006 Labor Act specifies working hours on a daily and weekly basis, as well as overtime
hours and their reimbursement. Working hours shall be 8 hours each day, with an interval as
defined in section 108. The weekly working hours will thereafter be 48 hours per day up to 10
hours per day, 60 hours per week, and on average 56 hours per week. Women workers are
restricted from working shifts from 10:00 p.m. to 6:00 a.m. without their approval. It should be
noted that no employee is permitted to work in two jobs at the same time. The payment of each
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worker must be paid before the end of the seventh day after the final day on which the wage is
payable, according to the Labor Law.
Labor costs increased 5% since 1997. Nonoperating Costs. Slightly less than two-thirds of the
cost of producing soybeans involves nonoperating
1.3 Loan Policy
Bangladesh's government took an initiative for the private sector after COVID19. The interest
rate will remain the same as it is now, but the loan-taking businesses will be responsible for 4.5
percent of the interest, while the government will cover the rest of 4.5 percent. In the case of
soybean oil, real domestic price in Bangladesh has always been higher than its real-world price
indicating higher concentration of import-based consumption. The gap between domestic price
and the world price of soybean has, however, increased in recent years.

2.Economic Dimension
Economic factors can have an impact on how well a company performs in the marketplace.
Unemployment rates, consumer disposable income, interest rates, rate of inflation, money
supply of the country, available notes, financial service and the gross domestic product are all
examples of economic situations and factors. These factors will not change for our individual
business. Our business has to adapt to these. If we can create collective force general
environment can change.
The market of the Soyabean oil is expanding rapidly in Bangladesh. Small, medium and big
companies have entered the segment in recent years. There is also a boom in these home-made
products.
2.1 Buying capacity
As Bangladesh's economy expanded and people's purchasing power grew, many more Oil
brands have been launched. Even the coronavirus pandemic has not been able to dampen the
mood of entrepreneurs looking to establish their footprint in the business as hundreds of them
set up shops in the last two years, since these products exploded into popularity during the
lockdowns as people spent more time indoors.
In recent months, the prices of edible oil, especially soybean oil, went beyond the capacity of
the low and middle-income groups, who were reeling from the onslaught of the Covid-19
pandemic.
As the Russia-Ukraine war began, price of the cooking ingredient went up to Tk 180 per liter,
breaking records of recent history, and the issue of soybean and other oil seed production came
into focus of the policymakers.
Prime Minister Sheikh Hasina recently said more soybean and sunflower should be cultivated.
But agriculture experts said although farmers initially become interested in soybean cultivation
due to the low cost and easy cultivation method, in the long run, they start to lose interest due to
multiple challenges.

2.2 Income level

Bangladesh's gross domestic product (GDP) grew 7.84 percent and the per capita income
increased to $1750 in the last fiscal year. That means the economy is growing. If the income

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level of people is increasing, then people can spend more money. An increase in spending will
help this business expand.
A crisis of edible oil, particularly soybean oil, has hit the domestic markets amid retailers and
wholesalers stocking up and refiners slowing down delivery, as prices of essential commodities
keep climbing in the international market.

Over the last several days, many consumers have returned from stores without being able to buy
the essential ingredient as retailers have had their shelves empty.
2.3 Inflation rate
The inflation rate is around 8.5% which is comparatively higher, and it is not generally good for
business. Because inflation can reduce the purchasing power of consumers. It means people will
buy less which can reduce the sales of the business. For this reason, then profitability of this
business and business growth both might go down.
2.4 Trade restriction
A trade restriction is a limitation on the exchange of products and/or services between two or
more nations that are imposed artificially. International commerce expands the range of goods
available to local customers, lowers the cost of those items due to increased competition, and
allows domestic businesses to export their commodities. Bangladesh's soybean imports will
likely grow 33 per cent in marketing year (MY) 2021-22. Bangladesh's soybean import is
projected to rise by 7.7 per cent year-on-year to 28 lakh tones in 2022-23 fiscal year, according
to a report of the United States Department of Agriculture (USDA).
Moreover, the import of soybean meal and oil will see a slight fall the next fiscal year thanks to
a rise in supply and crush of soybean seeds in Bangladesh.
3.1 Sociocultural Environment
The sociocultural environment, just like other dimensions, is a very important aspect of a
business environment. It can be defined as all the social surroundings impacting the growth and
operation of a business directly or indirectly. The cultural factors that construct the backbone of
a society is also included in this dimension. Social structures, values, class disparity, rituals,
long-running customs, beliefs, religious faith etc. create the sociocultural environment of a
business. This dimension consists of elements, conditions, and influences that shape the
personality of an individual and potentially affect his/her attitude, disposition, behavior,
decisions, and activities in a society. These values are often shared from generation to
generation. Some components of sociocultural environment of business are:
• Attitude
• Language
• Religion
• Education
• Health
• Job market mobility
• Class structure
• Family structure
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The generational movement of sociocultural environment is one of the major reasons for what
makes it so important for business. In our Bengali culture people love to eat various tasty items
which are cooked by Soyabean oil from many years. People can’t even think of cooking
without Soyabean oil though for dieting people nowadays using other oils but still this is on the
top. People of our country is not health conscious. This socioeconomic culture or tradition of
our country is making more growing of the industry.

3.1
Attitude:
It reflects how someone perceives and thinks about something and acts toward them. Business
firms must know and understand attitudes of people while formulating business strategies and
practices. The types of products acceptable to people, the distribution practices and the methods
of communication with customers all need to be in accordance with the prevailing attitudes.
Same goes for soyabean industry most of the people of our country cooks using Soyabean oil.
Various company like Rupchanda, Teer, Bashundhara Fortified Oil etc. is producing soyabean
oil now a days and making a good profit.
3.2
Language:
Soyabean companies in Bangladesh are named after Bengalis Terms though we totally import it
from other countries but it has mixed with our culture in such a way that can’t even think about
cooking tasty food without soyabean oil. The companies also doing the promotion in Bengali
Language and following the Bengali tradition.
3.3
Religion:
Bangladeshi people are festive in nature and religious festivals are the biggest festivals in the
country. In many religions many people can’t eat foods cooked with onion or many things but
can use soyabean oil according to their culture. In any festival various type of food is cooked
with soyabean oil. That’s why Soyabean industry is developing so well.
3.4
Health:
As a race we are at a higher risk of developing many diseases at some point of our lives.
However, Bangladeshi people are not very health conscious as most of us cannot tasty foods
regardless of our physical conditions. This cultural trait influences Soyabean oil manufacturing
companies to invest more into the business as there is a large market of consumers available in
the country.

4.
Technological Environment
Technological environment refers to the change in the field of technology that influences
businesses to adopt to new innovations in order to increase production and improve business
performance by the use of upgraded tools, machines, techniques, methods, and crafts.

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Technology helps a business to solve problems, ease the process to perform a specific task and
achieve goals. In the 21st century, with the massive development in telecommunications,
‘technology’ is the biggest buzzword. To sustain in the long run, businesses must accept the
changes and influences that this environment brings to the world and in the case of Bangladeshi
industries it is no different.
Soyabean manufacturing industries in Bangladesh are also getting benefitted by this external
environment of business. Technological improvement is aiding Soyabean industry in various
ways. It helps to increase productivity, achieve competitive advantage, create opportunities for
innovation, increase profit and develop customer values. In Bangladesh, there are currently 100
automated factories and more than 4500 traditional bakeries in operation. Among these, 60% of
the market is captured by the automated factories according to the estimates of industry
insiders. This gives us idea of how significant technology is in businesses, especially in
manufacturing businesses like Soyabean.

3.4 Customer Satisfaction

It is a metric used to assess how pleased customers are with a company's goods, services, and
abilities. A business can decide how to adjust or improve its goods and services by using data
on customer satisfaction, such as surveys and ratings. The satisfaction of a company's
consumers must be its priority. This holds true for commercial enterprises, retail and wholesale
establishments, governmental agencies, service providers, charitable organizations, and every
division within an organization (ASQ, 2019).

Model of Customer Satisfaction

Benefits of Customer Satisfaction

Keeping customer satisfaction levels high is crucial if one wants to boost customer retention
and lifetime value. Customers won't be hesitant to switch to a rival that provides lower rates,
better product alternatives, and better customer service exchanges if one doesn’t. Benefits of
customer satisfaction are:

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 1. Customer satisfaction identifies one’s strongest areas: One may identify what aspects of
your business are successful and keep doing them by tracking and assessing consumer
happiness. However, you won't know unless you do client satisfaction surveys. Growing
businesses place a high priority on customer success and identifying happy clients
through customer feedback is crucial. The results will reveal who these customers are
and what you are doing to improve their experiences with your business. You can carry
on doing what customers enjoy once you have this knowledge to encourage customer
retention, and you'll enjoy the following advantages:
i. It is less expensive to keep an existing customer than to find a new one.
ii. Repeat and devoted clients spend more.
iii. Word-of-mouth advertising is done by happy consumers, which aids in free
customer acquisition.
2. Understanding areas for improvement is aided by customer happiness: Finding areas for
improvement in the customer service plan might be aided by gaps in client satisfaction.
Making modifications to the product or services that satisfy customers and match their
desired experiences is impossible if one does not comprehend why customers are
dissatisfied. Sending out customer satisfaction surveys, evaluating the results, and
responding to unfavorable consumer comments are all essential.
3. Increased client loyalty and advocacy result from customer happiness: Customers who
are brand loyal are those whose satisfaction with the company is high. These clients will
send additional leads the way and provide the marketing staff with more testimonials.
For these users, one can develop customer advocacy programs that empower them to
promote the brand on the company's behalf. Customer advocacy programs offer rewards
to clients who recommend the company to new consumers. Customers that sign up for
the program are provided incentives, and in return for evaluations and comments, they
receive gifts or offers. This develops a connection that is mutually beneficial, rewards
your best clients, and maintains their loyalty.
4. Client retention is increased when customers are satisfied: Customer retention will be
better if customers are pleased overall. After all, satisfied clients won't be inclined to
switch to rival businesses. Contrarily, dissatisfied consumers will have many reasons to
leave, and it will be up to the team to persuade them otherwise. One may only have one
chance to prevent someone from churning, as 32% of customers say they would stop
using a brand they loved after one negative experience. By giving one access to
pertinent data regarding the client's interaction with one's brand, customer satisfaction
improves one's chances.
5. Longer client lifetime values are correlated with customer satisfaction: The predicted
profit from a single client over the course of their relationship with the company is
known as customer lifetime value (CLTV). After making their initial purchase, a
customer who is dissatisfied with your goods and services is very unlikely to ever use
your services again. You would lose out on prospective income possibilities because the
lifetime value of that customer is poor. On the other hand, happy consumers are more
inclined to stick around longer, making repeat purchases and boosting sales (Bernazzani,
2018).

Values the Competitors are Providing:

Companies shouldn't presume they understand what the needs of the client are. Utilizing
techniques like polls, focus groups, and customer surveys will help one better understand the
voice of the client. With the help of these technologies, businesses may get an in-depth
understanding of what their customers want and better design their services or goods to meet or

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surpass those expectations. So, for making sure the customers are satisfied soyabean oil
industry follows these rules:
Product Strategy:

Any item that can be supplied to a market to meet a need or desire is considered a product in
marketing terms. Three parts make up a product. They consist of the actual product, the core
product, and the augmented product. The quality, standout features, style, brand name, and
packaging are all characteristics of the actual products. The company's core goods help clients
and meet their needs. Products with enhancements provide service, warranties, shipping, and
installation.

Types of Products:

Soyabean products, among others Oil, is one of those products that people use most frequently
because it is a necessary ingredient in cooking, and they don't look for it too much if the brand
they want is not readily available. To capture the entire market, soybean oil sold their products
in a variety of sizes, 500ml, 1ltr, 2ltr, 3ltr, 5ltr, and 8ltr PET packs. Their consumers ranged
from lower middle class to upper class. Because the customer participation rate is higher and
they purchase and use this product so frequently, so, we can say competitors create value by
making it a convenient product.
Product Differentiation:

Product differentiation is what distinguishes a company's goods from those of competitors.

Products' quality, packaging, labeling, design, shape, and other factors can be among them.
Even though the size of the container is the same as that of all other oil brands, there are other
factors that aid Soyabean Oil competitors in adding value and leading the market as a leader.
The following crucial information helps to differentiate soy oil: Their oil is cholesterol-free and
abundant in Omega that helps lower blood pressure, provides the unborn kid more nutrients,
supports good skin, hair, and eyes that respond quickly, as well as avoid glaucoma.
Pricing Strategy:

The price indicates how much value or expense we are providing in exchange for a good or
service. The exchange should be balanced equally between the buyer’s and the seller's values.
The sellers of soyabean oil also create value in customer mind through price setting.
Packaging:

Packaging is important for the protection, handling, and storage of a product, as well as for the
marketing mix. Customers can recognize distinct brands thanks to their packaging. Soyabean
oil uses a pleasing color and a distinctive mark on its products so that customers can quickly
recognize it as their own. They do this to draw customers' attention to their product's packaging.
Accessibility:

Competitors also make soyabean oil available everywhere so that customers can find it and buy
it. it is one of the most important values that companies are given to customers.
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Competitors Missing Out:

Shortage:

Dramatic drops in soybean oil production as a result of South America's severe droughts have
been observed recently. Due to droughts, Canadian farmers are moving away from canola
crops. Indonesian exports of palm oil are prohibited due to rising domestic costs.
Expensive Product Cycle:

Depending on the method used to process one kilogram of soybeans, one can obtain varying
amounts of soybean oil. One can obtain around 130g of soybean oil by pretreating and pressing
soybeans. One will acquire about 190g of soybean oil if they extract it using the solvent
extraction method.

3.5 Forecast:
Short term and long-term challenges of Soyabean industry:

According to the United States Department of Agriculture (USDA), soybean import rate in
Bangladesh is expected to increase by 7.7% annually to 28 lakh tones, amounting to 7750,000
tones in the 2022-23 marketing year starting from October this year where the total import of
the current year was 750,000 tones. This can be considered as long-term challenge for
Soyabean oil industry. The crop is bringing substantial economic gains for hundreds of poor
people in Bangladesh. Farmers claimed that some small traders control the total soybean market
after creating a syndicate for which the farmers are not getting fair price. If the government
purchases soybean directly they will get fair price. Farmers are showing more interest in
soybean cultivation as it has been used in different purposes.
Local soybean production contributes approximately 5% of total annual soybean demand in
Bangladesh. Domestically produced soybean is used predominantly in the feed industry while
edible oil is imported both in crude form and as beans that are crushed locally.

Due to the low potential yields of available soybean varieties, soybean cultivation was limited
until recently. Of late, soybean has been gaining popularity as a cash crop, particularly among
farming households in the southern part of the country. the unavailability of high-yielding
varieties and a lack of quality seeds are hampering the expansion of soybean cultivation in
Bangladesh, the USDA observes. the project would help more farmers have access to high-
performing oilseed varieties. It would help the country cut import dependency for edible oil to
some extent. Besides, moves are underway to increase per unit productivity of rice so that some
arable land can be brought under oilseed cultivation as paddy takes up as much as 70% of
Bangladesh’s available arable land.
In Bangladesh, competing crops limit the available area for soybean cultivation. Soybean
competes with crops like winter rice (Boro), watermelons, sunflowers, and peanuts in the river
basin islands (char land) of the southern coastal region of the country. Char land can be used for

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soybean cultivation because the relatively low levels of water availability and increased salinity
in the late winter and summer seasons make some char lands unsuitable for rice production in
the Boro season. Generally, soybean cultivation requires less irrigation and less fertilizer than
rice.
Climate change and Natural calamity due to climate change is also a long-term challenge of
Soyabean Industry.

3.6 SWOT Analysis:

Strengths, Weaknesses, Opportunities, and Threats for impact across the field, farm, household,
community, landscape, and/or regional scales for soyabean industry:

Strength Weakness
• Crop grown around the year Always need to import though its being
• Domestic market produced in our country in recent days
• Favorable cropping season • Communication
• Favorable environment • Huge postharvest loss due to improper
• Favorable government policy for the management
farmers • Illiteracy
• Favorable weather • Lack of appropriate technologies
• Genetic resources • Lack of awareness
• Good agriculture extension network • Lack of knowledge on post-harvest
• Good working environment processing
• Hard working farmer • Lack of motivation program
• High young > 30 population • Lack of quality seed
• Huge number of hard-working manpower • Lack of quality seed supply
• Human resource • Lack of resources
• Improvement of farmer’s system • Land degradation
• Large number of cheap labors • Middle man between farmers and city
• Local machinery market
• Organic farming • Natural calamity due to climate change
• Safe food • Poor and illiterate farmers
• Poor purchasing capacity of farmers

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 • Seasonal fluctuation
• Small/marginal farm size
• Weak linkage between Research-Extension
Farmers
• Weak marketing facility
Opportunity Threat
• Cheap labor and adaptable farmers • Biotic and abiotic factors
• Development of management packages • Climate change
• Domestic market channel • Corruption
• Fertile land • Credit piracy (recognition)
• Higher education/training may be given in • Government policy
partnership with local university/institutes • Ground water table is going lower down
• Increase research facilities • Illiteracy of farmers
• More demonstration and training on • Illiterate farmers
appropriate technologies • Instability of price
• Natural resources • Lack of foreign assistance
• New technology • Lack of improved technologies
• Population (more people, more work) • Lack of linkage of research and extension
• Storage facilities of fresh produces • Lack of sufficient funds
• Technology exchange • Natural calamities
• Use of BARI developed technology • Need good governance
• Use of rural youth for dissemination • No appropriate government policies and
• Utilization of natural resources political unrest
• No sufficient fund for research and
extension
• Political affair
• Political instability
• Political unrest
• Poor farmers
• Poor marketing systems
• Poor transportation system
• Soil fertility depletion
• Unpredictable weather/climate
• Unstable political condition

4.0 Summary
The key players of soybean oil industry in Bangladesh are Teer, Rupchanda, Fresh, Pusti and
Bashundhara by capturing 97% of market share. After analyzing all the factors of the industry,
we can say that soybean oil industry is an attractive industry as it has supportive
complementary, moderate entry barriers, suppliers and buyers have moderate position, few
threats from substitute and moderate rivalry among competitors.
In Bangladesh, 97% of total of soybean oil consumption is used in food-based applications and
only 3% used for non-food-based applications. It is difficult to predict the price of soybean oil
as the market of soybean oil is volatile. After Russia's invasion of Ukraine, the price of a liter
soybean oil has increased from Tk.160 to Tk.198. Even though, Bangladesh has sufficient
manpower due to lack of resources and appropriate technologies, we must depend on the
imported soybean oil to meet the demand.

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5.0 Findings
 Soyabean oil exports on the global market is main factor influencing the price of
soybean oil globally.
 Dramatic drops in soybean oil production because of South America's severe droughts
have been observed recently.
 Because of pandemic soyabean oil has price increase.
 The market structure of soybean oil industry is oligopoly.
 97% of total soybean oil consumption is used for food applications.
 There is no significant substitute property threat for the soybean oil sector because of
higher price of substitute products than soybean oil.
 Teer soybean oil is the rivalry industry among the existing competitors.
 soybean oil sector complementors are supportive and producing attractive
complementary products.
 Soybean oil industry is attractive which is high profit potential.
 Soybean oil suppliers have moderate level of strong in their position, but buyers are not
that much strong because of their switching cost high and low threat to integrate
backward into the industry.
 Though Bangladesh has a high demand of Soyabean still we must import soyabean
which is increasing day by day
 Many farmers of our country have started to cultivate Soyabean but facing many short
terms and long-term challenges.

6.0 Recommendation

 There should be more local seed production.

 They should use better technology to extract soyabean oil
 Government must take necessary measure against syndicate traders who creates
artificial crisis of soybean oil.
 Our country should start to utilize soybean oil to produce environment friendly
renewable fuel.
 More demonstration and training on appropriate technologies of cultivating Soyabean
should be given.
 Government should give subsidy and motivate the farmers to produce locally so we
don’t have to import, and our farmers get the profit which will enrich our economy.

7.0 Conclusion
Soyabean is the most important oil crops in Bangladesh. Soyabean is an importance source of
food, Protein and oil. Soybean is important for feed, soil and as a component in a host of other
product. This industry is also increasing the number of Competitors, complementors and
producing attractive complementary. The satisfaction of a company's consumers must be its
priority. It is less expensive to keep an existing customer than to find a new one. Though
Soyabean has a big market in our country it is totally import based though in our country
Soyabean is producing but it is not enough as per the demand. The pandemic has caused supply
chain disruptions in the global soybean market, which have rendered the markets for its
byproducts and the overall crushing industry volatile. There is many short terms and long-term
challenges which should be turned into strength as soon as possible so that it can be produced
locally and proper technology should be used and the farmer should be iterated and trained
properly, there also should be scientific approach. Soyabean industry is a continues growing
industry of our country so there should be Government intervention so that Local producers feel
interested to grow more soyabean and the industry grow more. We have enough labor now the
resources should be turned into asset as soon as possible.
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8.0 References
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https://www.investopedia.com/terms/r/recurringrevenue.asp.

 Index Mundi. (n.d.). Bangladesh Soybean Oil Domestic Consumption by Year (1000

MT). [online] Available at: https://www.indexmundi.com/agriculture/?
country=bd&commodity=soybean-oil&graph=domestic-consumption.

 HowandWhat.net (2021). PESTEL analysis of the oil and gas (petroleum) industry.

[online] howandwhat. Available at: https://howandwhat.net/pestel-analysis-oil-gas-
petroleum-industry/.

 OEC - The Observatory of Economic Complexity. (n.d.). Soybean Oil in Bangladesh |

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 Correspondent, S. (2022). ‘Govt rewarded oil syndicates instead of taking action’.

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 Correspondent, S. (2022). ‘Govt rewarded oil syndicates instead of taking action’.

[online] The Daily Star. Available at:
https://www.thedailystar.net/news/bangladesh/news/govt-rewarded-oil-syndicates-
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 Investopedia. (2019). Cyclical Industry. [online] Available at:

https://www.investopedia.com/terms/c/cyclical_industry.asp.

 Bin Latheef, Mohsin (2012). Pulsed ultrasound-assisted solvent extraction of oil from

soybeans and microalgae. Research Gate.

 Index Mundi. (n.d.). Bangladesh Biodiesel Production by Year (Thousand Barrels per

Day). [online] Available at: https://www.indexmundi.com/energy/?
country=bd&product=biodiesel&graph=production [Accessed 29 Aug. 2022].

 Oraman, Unakitan, Hurma,2018. Application of Porter’s Five Force Model the

Vegetable Oil Industry in Turkey. Available at:

https://www.researchgate.net/publication/
330290451_Application_of_Porter's_Five_Force_Model_The_Vegetable_Oil_Industry_
in_Turkey

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