We have discussed more on automotive engine oil; however, the single-grade oil segment holds the lion’s share of the market. Till now, around 70% of the purpose of automotive and agricultural machinery needs are meet by the single-grade oil.
The agriculture-based economy, outdated public transport, and the industry standard keep roles for this single-grade oil market.
The agricultural pump-sets, shallow machines, second-hand machinery, local transports, and the repair industry are the key users of this single-grade oil.
The demand for agricultural lubricants in our country is expected to grow at 12-15% between the periods of 2018 to 2023.
The provision of subsidy for agricultural machinery and the increased mechanization in the agricultural industry are the key drivers of this oil segment.
In 2009, the government took up a Tk 150 crore scheme to speed up farm mechanization by offering 25% subsidy for agricultural types of machinery such as power tillers, tractors, power threshers and combine harvesters.
Later, the project was extended until June 2019. Now, up to 95% of the land is tilled by power tillers and tractors.
However, the key restraints are the availability of recycled oils in the market. And the lack of knowledge among small-scale farmers is also a concern.
Many unscrupulous businessmen are involved in recycled barrel oil business causes the availability of the lower-standard barrel products.
Recycled lubricants can be harmful in the harsh environmental and operating conditions – such as cold, heat, dirt and water – that can be detrimental to a lubricant’s performance in your equipment.
Farmers and other agricultural customers with automatic lubrication systems to ensure that their equipment is lubricated with the right lubricants, in the right amount, at the right intervals.
In Bangladesh, SAE 40 and SAE 50 single grade oils are highly-sold agricultural lubricants in rural areas.
However, the single-grade oil, especially for the agricultural multi-purpose use, has made this market segment a significant one.
Above all, most users are not aware of quality oils, still which are the key barrier for this market.
Recent years, the number of local oil marketers has been increased dramatically. By nature, they are the floating businessmen who deal in this market beyond the value chain.
Most floating marketers trade on the barrel oil especially works with single-grade oil by different local name.