There are several problems with agricultural exports showing potential
Agricultural products showed hope as a new sector for export. Exports of this sector have doubled in five years. In each of the last two fiscal years, more than 100 million dollars worth of goods have been exported. However, exports decreased from July, the first month of the current financial year 2022-23. Exports, however, recovered slightly in August, but overall agricultural exports declined in the two months.
In the first month of the current financial year, agricultural products worth 63.9 million dollars were exported, which is 35 percent less than the same period last year. Agricultural products worth 11.43 million dollars were exported in August. In this case the growth is 5 percent. Exports of agricultural products fell by 14 percent in two months.
Among the agricultural products exported are processed food products, fresh and frozen vegetables. Exporters say freight rates to most destinations have increased several times over the years.
Since last January, the price of packaging products has increased by 37 percent, the price of the dollar has increased by 20 to 25 percent and recently the price of flour has increased by 54 percent. The price of soybean oil is also higher. Because of these reasons, the competitiveness of most factories has decreased due to the increase in production costs.
According to the Export Promotion Bureau (EPB), the export of agricultural products in the 2017-18 financial year was $670 million. In the last financial year 2021-22, it increased to 116 crores. In the last two financial years, there has been a growth of 19 and 13 percent respectively.
Both fresh and frozen vegetables are exported from Bangladesh. The share of vegetables in the export of agricultural products is 8 and a half percent. While the overall export of agricultural products increased in the last financial year, vegetables were on the decline. In the first two months of the current financial year, exports of vegetables worth 7.4 million dollars, which is 75 percent less than the same period last year.
Vegetable exporters say that vegetable exports to Europe and the Middle East have decreased due to the increase in air fares after Corona. In European countries, before Corona, vegetables could be sent for 150 rupees per kg by passenger aircraft. At present it costs around 250 rupees.
Similarly, airfares to the Middle East have increased by 30 to 40 percent. Indian businessmen are taking this opportunity to seize the market. A lot of clothes go on passenger flights from Dhaka to the Middle East. The same rent that is collected in the case of clothes, is being kept in the case of vegetables. As a result, the price of vegetables is increasing. On the other hand, the exporters of that country can export vegetables at a low fare as clothes are not exported by flights to the Middle East from India.
General Secretary of Bangladesh Fruit, Vegetable and Allied Products Exporters Association (BFVAPEA) Mohammad Mansoor told Prothom Alo, “Indian businessmen are occupying our market.” He said that before Corona, there were more than two hundred vegetable exporters in the country. Currently it has reduced to 100 to 150 people.
Processed food accounts for a large proportion of agricultural products. Among the processed foods, masala, chanachur, jhalmuri, biscuits, sauces, jellies, potatoes, papads, noodles, chocolates, various pickles, juices, fruit drinks, chips etc. are exported.
Kamruzzaman Kamal, marketing director of Pran Group, a leading organization in the export of processed food products, told Prothom Alo, “Difficult times are going on due to the gas-electricity crisis and rising prices of raw materials.” But we are trying to manage the situation by increasing production capacity. In response to another question, he said, “In the first two months of the current financial year, our overall exports have not decreased.”
Hiefs Agro Food Industries currently exports a variety of processed food, beverages and spices to 18 countries. Last year the company exported processed food worth USD 3.2 million.
Chief Executive Officer (CEO) of Hisof Agro and former Vice President of Bangladesh Agro Processors Association (Bapa) Syed Muhammad Swaib Hasan told Prothom Alo last night, “The final price of our products is very low. The cost of the product has increased due to the increase in raw materials, packaging and shipping costs. But in most cases the final price of the product is not increasing. Because, if you do that, the customers don’t want to buy the product anymore. Therefore, efforts are being made to survive by reducing the quantity, increasing the production capacity. The work can be done easily by big companies, but small and medium companies are not able to do so much.
Swaib Hasan also said that the potential of processed food products is huge. Therefore, the duty of raw materials which are imported for export needs to be reduced. At the same time, the price of the dollar should also take a stable place.