1.

0 INTRODUCTION

1.1 Background
For five thousand years palm has been used as human food. It has been
originated from Africa. Palm tree was planted in 1848 in Indonesia and in
1911 in Malaysia for aesthetic beauty. In 1917 Malaysia first started
commercial production of oil palm. Sensing its importance after about 50
years Malaysian government took huge steps to cultivate palm and
started importing from 1966 and now became one of the greatest palm oil
producing country in the world in course of time.

Bangladesh yearly needs 23.2 Metric Tons of edible oil. 70% of which are
imported from the foreign countries. From one source 80% of the
imported oil is palm oil and the rest is soybean. While the price of edible
oil is increasing like a mad horse being independent in edible oil
production is a must. In this moment everybody should focus on this issue
as the prospect of palm oil production in Bangladesh is very bright.

1.2 Problem and Issues

Large part of edible oil is imported from foreign countries. For which huge
amount of currencies goes to other countries and dependency on edible
oil exporting countries are increasing day by day as well. In this situation
cultivation of oil palm can create a new horizon.

At present the oil is extracted from the fruit by hand in a very small scale
for domestic purpose. If a long term planning can be made for large scale
production of palm oil, it can change the whole economy of Bangladesh.
We can export the oil after meeting our local demand. We can take a
nationwide project in such a manner in which all the concerned entities
can be used in a collaborative way.

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1.3 Objectives

1.3.1 Broad Objective

The major objective of the report is to introduce large scale commercial
production and distribution of palm oil in Bangladesh with a professional
perspective.

1.3.2 Specific Objectives

• To get better orientation about the modern production process with
the help of state of art technologies.

• To analyze the distribution system of palm oil for having an efficient

and dynamic value chain.

• To elucidate existing drawbacks in this industry and to find ways to solve

them.

• To identify prospective uses of palm oil.

1.4 Rationale
Currently 80% of the edible oil used in our country is being imported.
70% of this is palm oil. If we can produce in our country in a large scale
surely the price of edible oil will come down. Again palm oil can be
produced 12 times more per hectares than soybean oil. The climate of
Bangladesh is very conducive for producing palm oil.

The beneficiaries of producing and distributing palm oil are as follows:

• General people

• Related industries

• Researchers

• Government

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1.5 Scopes and Limitations
Nutrition and savory palm oil is used in more than ninety countries around
the world. Known for its palatability and wholesomeness, palm oil has
inherent stability which makes it ideal oil for domestic and commercial
cooking.

The scope of our study primarily concerns about the production and
distribution of palm oil in the local market as an alternative of soyabeen
oil. Moreover, use of palm oil in various sectors such as dairy firm,
vanaspati, an alternative of butter ghee.

The plentiful vitamin E found naturally in palm oil gives a scope of

pharmaceuticals industry to produce vitamin E capsule with cheaper cost.

Apart from using as edible oil, the scope of non food uses of palm oil is
particularly in the oleo chemical industry. There are also lots of
opportunities in the soap industry and candle industry.

Although palm oil production and distribution has a high opportunity in our
country, we will face a major limitation that there is not enough
information about the palm oil industry as the market is not matured
enough.

1.6 Methodology and Source of Data

The report will be based on both primary and secondary data. The
secondary data will be the main input for the report. This creates a
theoretical basis of the report. The primary research will be done to know
about the current palm oil production and distribution scenario in
Bangladesh.

1.6.1 Primary Sources of Data

Following methods will be followed to collect primary data.

▪ Informal discussion with agricultural expert to get the overview of

palm oil production

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 ▪ Discussions with commercial experts to spot the existing distribution
mechanisms

1.6.2 Secondary Sources of Data

The secondary data will be collected from different publications related to
the production and distribution of palm oil. The secondary sources are;
journals, articles, internet and so on.

1.6.3 Data Collection Method

For the organization part information will be collected through different

published articles, journal, and books. Basic production and distribution
information will be collected through informal discussions with agricultural
and commercial experts. Questionnaire would be used as data collection
tools.

2.0 PRESENT SCENARIO OF EDIBLE OIL MARKET

For last few couples of years, palm oil occupied 70% share of county’s
edible oil market, but in 2007 its market share declined to about 60%.
However, from the beginning of 2008, palm oil is regaining its position and
currently occupying again 70% share of country’s edible oil market. As per
import information, in 2008, a quantity of 816,000 tonnes of palm oil was
imported in the country which is about 74% of the total import of oils and
fats in that year. As the country has huge refining capacity, mainly crude
palm oil/olein at the ratio of 15:85, on an average, are imported in the
country. Price competitiveness, quality, change of food habits - specially
in urban areas, stagnant indigenous production etc. are contributing
together in the increasing trend of import of crude palm oil/olein vis-à-vis
consumption of refined/super olein in the country.

As the country’s per capita consumption of total oils and fats was in
increasing trend in pace with economic growth and rapid urbanization,

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import of oils and fats also being increasing steadily in pace with the
upward trend of consumption.

Under mentioned chart would give a picture about the consumption trend
of various oils and fats in the country since 2001 to 2007, which would
show that consumption of palm oil has been increased substantially
during the recent years surpassing refined soyabean oil, which was
dominating the market for decades and traditionally preferred mustard oil.
Although the consumption of palm oil declined in 2007 due to substantial
high price of the same in the local market in pace with the international
market, it is again on increasing trend in 2008.

Source: Bangladesh Bureau of Statistics, Oil World and MPOC Market

Intelligence

Bar chart on import trend of major 3 edible oils in the country during 2001
to 2008, furnished hereunder establishes that import of palm oil being
increased steadily since 2001 compared to other two major edible oils
consumed in the country. Although import of palm oil decreased in 2007
compared to 2006, but it picked up again in 2008 when the import of palm
oil increased by about 15% compared to 2007.

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 Year Soyabean Palm Mustard
‘000 tones
2001 464 380 95
2002 386 436 45
2003 362 498 70
2004 356 644 48
2005 210 931 33
2006 301 887 52
2007 495 709 57
2008 217 816 27
Source: Oil World & MPOC- Dhaka office

Due to economic condition of major segment of 150 million populations of

the country, almost 75% of the total oils and fats consumed annually are
sold in loose form, where palm olein is dominant and the rest 25% market
share is under consumer packs, where soyabean oil is in leading position
and palm oil’s position is second. Numbers of palm olein brands namely,
Meizan, Natural, Pure, Family, Dada Super, Shakti etc. are being marketed
in consumer packs in Bangladesh. Observing the demand of palm olein
brands, refiners are being encouraged to launch more and more palm
olein brands in consumer packs.

3.0 PALM OIL IN BANGLADESH

The liquid gold of green tree has appeared as the beaconing of new hope
before the people of Bangladesh. The palm oil tree changed the fate of
the South East Asian countries. Recently it has been giving amazing

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production in our country. If the palm revolution can be spread throughout
the whole country, ten thousand crore taka can be saved which
Bangladesh spends every year in the importation of edible oil.

Bangladesh is deficit in oils and fats since pre-liberation period and was
dependent on imported oils. Palm oil was first introduced in Bangladesh in
early ’70s just after liberation to meet the growing demand. As there was
no facility for refining of crude palm oil in Bangladesh, only refined palm
olein, which is locally known as palm oil, was used to be imported which
continued till early ’90s. During this period, refined olein generally, was
being imported mainly from Singapore. During that time imported olein
used to be distributed through govt. rationing system, besides, private
trading. Because of its quality as well as price competitiveness compared
to other cooking oils, it earned consumer’s confidence quickly as good
cooking oil. But in mid ’80s, due to malpractices of some unscrupulous
traders coinciding with anti-palm oil campaign by some vested corners,
negative perception about palm oil developed among the consumers of
the country and consumption of palm oil started to decline.

However, import of palm oil in crude form started to arrive again during
early ’90s, when local edible oil industries acquired the technical
knowledge of palm oil refining and being equipped with most modern
machineries, these industries started to produce world class refined palm
olein, which received a good response from the market. With the
introduction of double-fractionated palm olein in the later part of ’90s,
which is locally known as super olein, the acceptance of palm olein in the
country rapidly increased and in the year 2002, palm olein managed to
occupy the leading position among major 3-edible oils, namely refined
soyabean oil, refined olein and rape/mustard oil, consumed in the country
which is still continuing. As on today, dozens of palm oil refining plants
equipped with latest “Programmable Logic Controlled” equipments having
refining capacity ranging from 300-1000 tonnes per day each, are in
operation in the country and producing world class refined olein and super
olein. Refineries are situated in and around Dhaka and Chittagong city.

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In Bangladesh, apart from consumption of palm olein and super olein as
cooking oil, annually about 300,000 tonnes of refined olein is being
consumed by the local food processing industries namely, vanaspati,
biscuit, bread and bakery products, fried snack food such as chanachur,
potato chips, dal bhaza (fried pulses), instant noodles, condensed milk, ice
cream, sweet meats etc.

3.1 Success Story

A retired government officer named Osman Goni has played the vital role
in the amazing success of palm cultivation. Eighteen years ago giving up
the job as a Tohshildar he started dreaming about palm tree. He had
never seen any palm garden of Malaysia. Hearing about it from his
relatives he became curious. He started with 25 palm seeds. Initially he
was frustrated as the seeds took a long time to sprout. In the Pakutia
village of Ghatail upogila of Tangail, in his daughter’s residence he
planted some plants. In the hilly region adjacent to Pakutia he planted
some more trees. Osman Gani lost many things in his life for his dream of
palm garden. He was disheartened, when the sufferings reached to the
zenith his son and daughters tried to resist him. At that moment Saif
Ahmed, a business man stood by his side. He himself was a dreamer to
change the lot of Bangladesh. He provided the mental and financial
assistance to Osman Gani . Saif Ahmed along with Osman Gani and his
son Masud established Bangladesh palm development project, which is
recognized as the first non-government institute .K.M Fakhrul Alom, the
country director of Bangladesh, Nepal and Myanmar of Malaysian palm oil
council, stood by their side with advice and other assistances.

The probability of palm oil cultivation had been being discussed among
the specialists for a long time. President Ziaur Rahman once took the
initiative of a palm garden. At the end of the 90’s during Awami reign an
initiative was taken by the Bangladesh Army. But later the initiative went
in vein. After that many personal initiatives were taken by some people
who had the experience of working in the palm garden of Malaysia.
Alauddin of Ghatail is one of them who planted some palm plants in front

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of his home five years ago. Four of them have now blessed with fruits.
One KG oil can be gathered from a small bunch. Some of the bunches
have been dead. But Alauddin is very optimistic. Recently he as well as his
wife has been seen to water the plants. Now comes again Osman Goni. He
lost his house long ago but and planted the palm plant in front of his
daughter’s house. He has made a nursery in the yard of his daughter’s
house. On the news of our arrival Alauddin had fetched some purple
bunch of palm from the hilly region. But the strange thing is that in
Malaysia the weight of a palm bunch is not more than 40 kg where as the
weight of that in Ghatail is 60-65 KG. The size of a palm fruit is also much
bigger in comparison with Malaysia. In Malaysia the rate of oil collection
from the palm fruit is 25% where as it is 37% in Ghatail.

Osman Goni according to his 18 years of experience thinks that Palm

garden is not only feasible in Bangladesh but also consequent. He said
that he has achieved this grand success without any experience. His only
companion was his strong determination. He had encountered obstacles
even from his family so long. Now everyone has come forward. In the tree
plantation movement people are being encouraged to palm tree
nationally. He thinks that the palm cultivation can be very profitable in the
hilly region of Chittagong Hill Tracts, Sylhet and in the hilly region of
Mymensingh. The businessman and organizer Saif Ahmed also thinks like
that. He believes that the Palm cultivation can be spread socially on one
hand it can be helpful to remove poverty and on the other hand
Bangladesh can be self- sufficient in sector of edible oil. Thus a huge
amount of foreign exchange can be saved.

4.0 FEASIBILITY OF PALM OIL BUSINESS IN BANGLADESH

Palm cultivation is in a rudimentary stage in our country. There is no

large scale production and only few individuals are cultivating it in
personal interest. In our “success story” section we already named them

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and we will proceed on with our analysis based on their experience and
data.

4.1 Cultivation
Osman Goni has sprouted plant from the seeds of own trees. The seed
requires one year to be sprouted. After two years the plant begins to grow
rapidly. It takes 5 years to have fruit. Initially the bunch and fruit remains
small and in course of time both fruits and branches begin to grow bigger.
Osman Goni has got some of the bunch which is 80 kg in weight. In
Malaysia the average weight is generally 20-40 kg.

4.1.1 Soil Requirement

Highland soil with good drainage condition is favorable for palm tree.
Mainly hilly soils and terrace soils are recommended for palm production.
In Bangladesh this type of soil is available in four out of six divisions.
Palm can be cultivated in Dhaka, Chittagong, Sylhet and Rajshahi division.
Large area of these divisions are occupied with either terrace or hilly soil.

4.1.2 Fertilizer Requirement

It does not require fertilizer. But palm trees are generally cultivated along
with leguminous plants. It protects soil erosion and also provides nitrogen
to the soil.

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4.1.3 Topography
Medium to high land is required for palm cultivation.

4.1.4 Climate
Palm tree requires tropical climate. Temperature ranges from 19.5oC to
28.5oC is most favorable for palm tree. Annual amount of rainfall of
1900mm to 3500mm is optimum for palm production.

4.1.5 Nurturing
Palm tree does not need so much care like other oils. Besides, the
production of palm oil per acre is much higher than that of other oils.

4.2 Production per acre

The economic and environmental advantage of palm oil is much more
than other oils. Soya bean, corn or mastered oil is produced again and
again where palm tree gives fruits just after the 4-5 years of plantation

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and it keeps going for 30 years. Palm tree does not need so much care
like other oils. Besides, the production of palm oil per acre is much higher
than that of other oils.

Among all the vegetable oils palm oil production is 605 gallon per acre. In
the same area coconut oil is produced 287 gallons, olive oil 129 gallons,
rapeseed oil 127 gallons, nut oil 113 gallons, sunflower 102 gallons,
mustards oil 61 gallons, soyabean oil 48 gallons, and corn oil 18 gallons.

In comparison with soyabean oil the production of palm oil is 13 times

higher. Besides, the food value of palm oil is more than soyabean and
other oils. From the environmental point of view palm cultivation is
positive. The palm is productive for 30 years and the carbon abundance is
much less in comparison to master and soyabean. Besides after collecting
the fruits the bunch can be processed as fertilizer.

4.3 The indigenous style of Palm oil collection

Among all the edible oils only Palm and olive oil can be eaten without any
processing. That is why no mills and refinery is required in collecting palm.
For collecting oil fruit is cut from its bunch and is boiled. After boiling the
palm fruit juice can be collected by the pressure of finger tip. When the
water mixed palm oil is boiled the water becomes evaporated and red
colored oil is found. To get a golden hue the red color is removed through
bleaching. So the vitamin A does not exist. But if the oil is processed in
indigenous style the vitamin A sustains. The collected palm oil can be
used in any cooking purpose. The palm fruit is available in any seasons of
the year and only a few palm trees are enough to maintain the necessity
of a family.

4.4 Health benefits

4.4.1 Healthier Hearts

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Numerous studies have shown that palm oil in the diet lowers total blood
cholesterol and 'bad' LDL cholesterol and increases the 'good' HDL
cholesterol. It contains little to no trans-fats that raise LDL cholesterol and
increase the risk of heart disease. Palm oil also does not promote the
formation of plaques in the arteries and has an anti-blood clotting effect,
both which helps prevent heart disease.

4.4.2 Anti-Ageing Palm Oil

Palm oil is rich in Vitamin E. In fact, no other vegetable oil has as much
Vitamin E compared to Palm Oil. Vitamin E is a powerful anti-oxidant,
capable of reducing the harmful types of oxygen molecules (free radicals)
in the body. This means they may help to protect one from certain chronic
diseases, while delaying the body's ageing process.

4.4.3 Preventing Cancer

Palm Oil contains chemical compounds that are scientifically beneficial

towards preventing cancer. One of the easiest ways to prevent cancer is
to avoid consuming hydrogenated fats by selecting food products that use
palm oil or fats made from palm oil. Palm oil-based products are free from
trans fatty acids.

4.4.4 Effect of palm oil on basal metabolic rate

Some available evidence shows that palm oil has a similar metabolic
effect on fat catabolism as unsaturated fatty acids. Thus fresh palm oil is
more beneficial to the body with respect to overall heat production.

4.4.5 Effect of palm oil on body weight, growth and

morphology of tissues
Fats and oil, like other classes of food, exert some degree of influence on
body weight and tissue morphology. Palm oil feeding did result in body
weight values that were lower than those found after feeding highly
unsaturated oil. Study also showed that palm oil contributed to low weight
gain, sparse hair and unhealthy skin in the experimental animals.

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4.4.6 Effect of palm oil on tissues lipid distribution
Recent experiments have demonstrated that palm oil diets lower the
plasma levels of triglyceride, LDL cholesterol and do not decrease the
level of HDL-cholesterol. The effect of palm oil on other lipid distribution in
various tissues is similar to that reported for blood cholesterol.

4.4.7 Effect of palm oil on blood pressure and contractile

activity of blood vessels
Palm oil, with its saturated and unsaturated fatty acid components,
contributes to the level of blood pressure.

4.4.8 Palm oil and liver enzymes

The liver is an organ for metabolism of various compounds in the body
and also the primary target of oxidative injury. It is more or less altered in
structure in any metabolic disorder. Palm oil seems to have some
protective effect against oxidative damage.

4.5 Other uses of Palm

4.5.1 Bio-fuel
There are a number of advantages in using palm oil for the production of
biofuel. Unlike fossil fuels, the combustion of palm oil biofuel does not
increase the level of carbon dioxide in the atmosphere as the oil is merely
returning carbon dioxide obtained earlier from the atmosphere through
photosynthesis. As such, biofuel is regarded as carbon neutral.

Since carbon dioxide is a greenhouse gas responsible for global warming,

the world benefits by the burning of biofuel instead of fossil fuel.
Additionally, the palm trees that produce oil have simultaneously
absorbed a lot more carbon dioxide during photosynthesis to form

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biomass for the other parts of the plant. The tree continues to absorb
carbon dioxide throughout its life span of 25-30 years.

4.5.2 Skincare and Cosmetic Products

Hot weather and the sun's ultra-violet rays can damage the skin. That's
why people use moisturizing creams and lotions for protection. For added
beauty, they also use cosmetics. Most cosmetic products are made of
palm oil. As a versatile vegetable oil, palm oil is suitable for making
cosmetic products like lipsticks for example. Palm-based cosmetic
products have also been proven to be the best in quality in terms of
moisturisation properties

5.0 ADVANTAGES OF PALM OIL

5.1 Advantages of Palm Oil over Other Edible Oil

Dimensions Palm Oil Other edible oil
Health Cholesterol level is low Cholesterol level is
high
Refining Not necessary Necessary (except
olive)
Production per acre Higher Lower
Fertilizer Low High
Nurturing Little Extensive
Plant life 30 years 4-5 years
Oxygen Production Higher Lower
Other uses Great prospect as bio Little prospect as bio
fuel fuel

5.2 Advantages of Bangladesh over Malaysia

Dimensions Bangladesh Malaysia
Labor cost Low High
Weight of bunch 60-65 kg 40 kg
Oil Content 37% 25%

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6.0 A PROPOSED MODEL IN LIGHT OF MALAYSIAN MODEL
Malaysia is regarded as the pioneer in commercial palm oil production and
distribution. They follow structured and well organized cultivation process,
refining process and distribution. So, following Malaysian model would
help to get insights and necessary knowledge to develop a model of our
own. In this section a model is proposed based on that model that is why
background of Malaysian palm production is also incorporated here.

Planted Area under Oil Palm

In Malaysia the largest oil palm growing states were Sabah, Johor and
Pahang, accounting for about 63% of the total planted area. The rate of
planting in Sabah has been impressive, considering that commercial
planting in the state only commenced in 1970.
Although commercial planting of oil palm in Malaysia began in 1917,
large-scale cultivation did not take off until the .The growth of the
industry, in terms of planted area since then has been very rapid. In 2001,
the total area planted with oil palm was 3,499,012 hectares, 59.9% or
2,096,856 hectares being in Peninsular Malaysia, 29.4% or 1,027,329
hectares in Sabah and 10.7% or 374,828 hectares in Sarawak. The last
decade had seen rapid expansion in the cultivated area in Sabah and
Sarawak; while planting in Peninsular Malaysia had slowed down because
of diminishing availability of new land for the crop.
The similar story also prevails in our country. We have hilly regions
basically in Chittagong, Sylhet, Mymensingh region. So, the cultivation
would be concentrated in those regions. These area also occupy available
lands because not all types of crops are cultivatable here.

6.1 Production
With the rapid expansion in the planted area, the annual production of
palm in Malaysia had increased significantly in Malaysia; the crude palm
oil (CPO) produced in 2001 was 11.8 million tonnes which was 4.6 times
the volume produced in 1980. The increase in production in Sabah was

16
particularly impressive, reflecting the aggressive planting policy in the
state and it became the largest CPO producer in 1999. In 2001, Sabah
accounted for 31.5% of the national production. Other major CPO
producing states are Johore, Pahangand Perak in Peninsular Malaysia.
Table: Production of Crude Palm Oil in Malaysia (Tonnes)

Region 1980 1990 1995 1999 2000 2001

P. Malaysia 2,394,324 6,094,622 6,094,560 7,427,838 7,221,539 7,477,338

Sabah 156,471 678,995 1,493,623 2,664,516 3,110,320 3,716,168

Sarawak 22,378 107,651 222,363 461,564 520,236 610,282

Total 2,573,173 6,881,268 7,810,546 10,553,918 10,852,095 11,803,788

Source: MPOB (cited in www.mpob.gov.my)

Key Processes in the Production of Palm Oil

The following production process is actually a replication of Malaysian
process with some modification.

Production of Fresh Fruit Bunches (FFB)

The key sub-processes involved in the development of plantations for the
production of fresh fruit bunches (FFB) are shown in Figure and the main
activities for each step are summarized in the following page:

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 Planning Phase

Figure: Processes in the Production of Fresh Fruit Bunches

Nursery Establishment

Site Preparation

Field Establishment

Field Maintenance

Fresh Fruit
To
ToPalm
PalmOil
Oil
Bunches
Harvesting & Collection Mill
Mill
(FFB)

18
Replanting
Planning Phase

Planning phases for the development of new plantations would involve the
conduct for feasibility studies and an environment impact assessment
(EIA) if the area to be developed is primary or secondary forest in excess
of 500 hectares. An EIA is also required if the development involves
changes in the types of agricultural use of land in excess of 500 hectares.
The EIA study would facilitate the identification potential environmental
and social impacts and development of management plans to mitigate the
adverse effects. The process for the approval of EIA reports is shown in
Figure 4 which is based on the approach adopted by the
Natural Resources and Environment Board, Sarawak.

Nursery Establishment
It commences as soon as the land is found to be suitable and approved by
the respective agencies for development to proceed. Good quality DxP
seedlings are raised in a polybag nursery for about 12 months. Good
nursery practices such as adequate watering, manuring and culling of
seedlings with undesirable characteristics are essential for the production
of vigorous planting materials. A culling rate of up to 25% is commonly
practiced in well managed nurseries but in Bangladesh it is projected
more than 35%.

Site Preparation
It includes land survey, clearing of existing vegetation, establishment of a
road and field drainage system, soil conservation measures such as
terracing, conservation bunds and silt pits and sowing of leguminous
cover crops.

Field Establishment
Activities are lining, holing and planting of poly bag oil palm seedlings at
density of 136 to 148 palms per hectare, depending on the soil type. It is
important that effort is made to obtain full ground coverage by

19
leguminous cover crops such as Pueraria javanica and Calopogonium
caeruleum to minimise soil loss through runoff as well as to improve the
soil properties through nitrogen fixation.

Field Maintenance
Operations include weeding, water management, pruning, pest and
disease management and manuring. Integrated pest management
involving a mix of cultural, physical, chemical and biological control
approaches to minimize crop losses to pests is commonly adopted in
plantations. Examples of biological control measures applied include the
use of baculovirus and Metarhizium anisopliae to control the rhinoceros
beetle (Oryctes rhinoceros), control of leaf-eating bagworms and nettle
caterpillars by their natural predators and parasitoids and the use of barn
owls (Tyto alba) (Plates 7 and 8) as the biological agent to control rats.
(Golden Hope Plantations Berhad, 1997). As the cost of fertilisers is the
major component of field upkeep expenditure, plantation companies
generally undertake soil and foliar analyses of individual fields regularly to
assess their nutritional status and determine the appropriate types and
quantities of fertilisers required for optimal palm development and
production.

Harvesting and Collection

Harvesting of FFB commences between 24 to 30 months after field
planting, depending on the soil type and agronomic and management
inputs. Harvesting is done manually, using a chisel in young palms and a
sickle mounted on a bamboo or aluminum pole in taller palms. There are
various systems for in-field collection of FFB and transportation to the
palm oil mill. In view of increasing shortage of workers as well as the need
to increase worker productivity, mechanized approaches have been
adopted by plantations, an example being the tractor-mounted ‘grabber’.

Replanting
The economic cycle of the oil palm is about 30 years, after which the old
stand is replanted. The zero burning technique of replanting is now

20
common commercial practice. However, in some situations, plantations
consider.

Under planting
It is the process in which new seedlings are planted under the old palms
which are thinned out progressively to allow the development of the new
stand.

6.2 Channel of Distribution

Effective distribution is a must for proper commercialization as well as
maintaining the food value. Malaysia also here operates with precision
which is also applicable in our country’s case. The distribution
incorporates both domestic and international channels

The pattern of channel of distribution has so far been as follows: the

cooking oil industry of palm oil obtains its raw material from its own
plantation or from other CPO producers, either private or state-owned
companies. Meanwhile, the cooking oil industry of coconut oil obtains its
raw material from collecting trader. The processing industry distributes
the cooking oil it has produced through marketing chain it has developed.

The channel of distribution of palm oil in domestic and overseas market

can be described as follows:

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7.0 PROMOTING PALM OIL IN BANGLADESH
As a new inception of organized palm production and distribution, such
effort requires some creative and focused approach of marketing. Local
production and distribution will help people to enjoy comparatively lower
prices. Moreover, since palm can also be exported to abroad government
will help the industry by taking incentive programs. In addition, as a part
of agriculture sector direct support of government can be expected. To
gain desired response structured marketing strategies will be followed.
Some of the strategies are as follows:

• People awareness would be created through campaigns focusing

health benefit issues.

• Lower price can be offered because of the lower production cost and
cost advantages.

• ‘Indigenous product consumption’ campaign would be executed.

• Well structured supply chain would be ensured.

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 • Intermediaries would be offered higher margin to promote specific
brands.

• Seeking government incentives for promoting the business

countrywide.

• NGOs can take initiatives to popularize palm oil in our rural areas.

8.0 PROBABLE CONSTRAINTS

• It takes quite a long period to have fruits and thus first production of
palm oil. So, initially farmers or entrepreneurs have to wait to
generate cash inflow.
• In spite of consuming palm oil still soyabean is considered as prime
edible oil. Palm oil still lagging behind in popularity.
• Without having government’s assistance it is too hard to materialize
such project in large scale.
• A group of people who are benefited by the import of Palm oil may
discourage palm oil production in Bangladesh.
• Farmers are not sure whether they can market there product, this
deter many farmers to start palm cultivation.
• Lack of expertise is also a vital limitation.

9.0 CONCLUSION
Provided the economic and health benefits it is the high time for
Bangladesh to start commercial production and distribution of palm
oil. Bangladesh is in a better situation for production of palm oil than
Malaysia, and palm oil production is also more beneficial than other oil
production. The success story of Mr. Goni reveals that palm oil
production in Bangladesh can be more effective. Also we have a lot of

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 hilly areas in our country for palm oil cultivation. The weather is also
very much suitable in our country for palm trees. But Government has
to come forward to help businessmen and farmers financially and by
providing the interested stakeholders with experts. Without proper
knowledge and enough financial support, successes like Mr. Goni can
come, but for commercial production and distribution of palm oil
Government's help and support absolutely necessary.

REFERENCES

• Bjorn, F. & Dhalen, F. 1995. Malaysian Palm Oil. Malaysian Palm Oil
Promotion Council. Malaysia.
• Rahman, M.R., 2005. Soil of Bangladesh. Soil Resources
Development Institute (SRDI). Darpan Publication, Dhaka, Bangladesh.
• http://mpoc.org.bd

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• http://mpoc.org.my
• http://thedailystar.net
• http://dailynoyadigonto.com

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