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Agro-processing industry: Bangladesh’s next export frontier

  • Published at 09:48 am February 24th, 2019
Source: BAPA

The market of agro-processing products is increasing very fast both in domestic and export markets

Bringing a solution to post harvest losses, agro-processing industry has opened a new avenue for the Bangladesh in the field of export earnings, which already witnessed a 41% rise to $374 million in the last fiscal year.

According to Export Promotion Bureau (EPB) data compiled by Bangladesh Agro-Processors’ Association (BAPA), in the fiscal year 2017-18 Bangladesh earned $371 million, up by 40.72%, which was $263.63 million the previous year. 

Since Bangladesh is an agricultural country, the opportunity is unlimited in tapping the export potentiality due to availability of the raw materials, said people related to the sector, while talking to the Dhaka Tribune.

While a huge amount of crops are being wasted due to lack of processing and supply chain, it can be reduced through establishment of a strong processing industry.

“There are huge demands of Bangladeshi goods in European countries, especially in the United Kingdom, where there are about 14,000 restaurant, which uses Bangladeshi products and consume our foods,” Md Gulzar Rahman Biswas, manager (international marketing) Square Food and Beverage Limited, told the Dhaka Tribune. 

Square Food and Beverage Limited is currently exporting the products with international standards in 30 countries around the world which includes Australia, Europe, North America, Africa and Asia.

While Gulf countries are the prime markets as there are huge Bangladeshi expatriates in those countries with huge Muslims inhabitants itself, said Gulzar.

The market of agro-processing products is increasing very fast both in domestic and export markets. This is because of quality and reasonable prices of goods, he added.

A solution to post harvest

In Bangladesh post harvest damage is a threat to the sector, which brings woes to the farmers. According to the sector people, the post harvesting losses of the sector stood at about Tk30,000 crore per annum.

“Bangladesh has potentials to improve agro-processing, which can raise food growers income and reduce post harvest losses. While rural economy can be boosted significantly as the people can set up small and medium size enterprises across the country,” Manmohan Parkash, country director of Asian Development Bank (ADB), Bangladesh said. The ADB is providing support to develop a supply chain and development of agriculture sector. 

Food safety and packaging are still impediment to further growth of sector, these could be overcome by adopting  latest technologies, which can accelerate this growth momentum further, said Manmohan.

We are now working a projects that can improve the value chain focusing on backward and forward linkage. We will continue to work closely with the government  and other development partners and stakeholders to further improve the agriculture sector, he added.

What are the challenges? 

Despite having bright future in terms of product diversification, export market, there are some challenges for the sector. 

Challenges include non-tariff barriers in exporting goods to our neighboring countries, post harvesting storage capacity, lack of credit for SMEs and technology. 

“There is huge demand of Bangladeshi good across the globe as price and quality of goods is very attractive to the consumers. Non-tariff barriers are the great challenge for Bangladesh with neighbor countries such as India and Nepal,” Kamruzzaman Kamal, director (marketing) of Pran-RFL Group told the Dhaka Tribune. 

“To this end, Bangladesh government has to move for bilateral talks to remove this through negotiation and agreements.”

Pran is witnessing an average 30% growth anally in the global market, which export product items such as chips and crackers, noodles and pasta, nuts and pulses, “chira” (flattened rice), fruit drink, puffed rice and sweetened rice puffs.

Since Bangladesh does not have the testing lab facilities for getting recognition to enter into the global markets, it is another big challenge to meet the international standard requirement, said Kamruzzaman.

It takes time and spends a lot of money to get testing certification from other countries. So, the government has to ensure lab testing facilities to the processors, he added.

How to grab more market share 

In attaining the $1 billion target by 2021 and to increase market share in the global export market, Bangladesh has to ensure global Good Agriculture Practice (GAP) in every stage of production and processing.

“In the agro-processing sector, the value addition is very high as the raw materials are fully from the local sources. So, making the sector strong will help Bangladesh to reduce dependency on single sector and to diversify export goods,” AFM Fakhrul Islam Munshi, president of BAPA told the Dhaka Tribune.  

But the sector has to concentrate on product Development and exploring new markets key to grab market share, said Fakhrul. 

Product diversification can be done by utilizing different crops which are produced abundantly in Bangladesh such as jackfruit, pineapple, banana and guava as there is surplus production in the country, he added.  

If the government provides policy supports and testing facility required to for ensures standard to reach the global standard. Bangladesh will be able to reach $1 billion earning mark by 2020, stakeholders opined.   

Meanwhile, the sector people and stakeholders stressed on commercial agriculture as our agriculture is still subsistence one. 

“For the development of the country’s agriculture, we have to graduate our subsistence agriculture to commercial agriculture,” Agriculture Minister Abdur Razzaque told the Dhaka Tribune. 

In ensuring fair price of agricultural products for the farmers, we will provide subsidy and develop a better supply chain, said the minister.  

Since the country is marching toward economic development, government has to concentrate on developing the SMEs as it would turn into a industry later.

Talking to the Dhaka Tribune stakeholders called for policy supports including establishing test lab, credit to SMEs and removing non-tariff barriers.

In addition, both the government and the sector people have to move for adoption of technology for packaging and products development, they added.

AS per the data, Asian countries are the largest markets which import 80.66% of total products, while Africa imports 7.91%, Europe imports 4.66% and North America 5.12%.  

Exported products 

According to BAPA  data, agro-processed products include pickle, chutney , mango bar, jam jelly, juice, spices, aromatic rice, fine rice,  tea, chanachur, peanuts, mustard oil, biscuits, zira cut supari, drinks, seeds, candy,  puffed rice, flattened rice, flour, hair oil, isubgul, ghee, noodles, vermichili, kashundi, frozen vegetables, snacks, rose water,  dried dal/peas, potato crackers, honey, molasses, jardah(tobacco), diabetic firni mix, meat, sweets, milk powder, lassi, sesame seeds, black berry,   potato flakes, sesame oil, sugar cane, puff corn, sesame bar and canned pineapple.

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