Agriculture exports fall short of target
The price of Bangladeshi goods in the international market has increased by 20-30% due to freight charges
In the last nine months, only $687 million worth of agricultural products were exported, which is 28% less than the corresponding period last year, and also one-third of the $1 billion target, according to the Export Promotion Bureau (EPB) statistics.
Exporters blame the decline on the ban on aromatic rice exports, the additional freight charges, and the unavailability of cargo spaces, causing a hike in Bangladeshi products in the international market.
Agro-product exporters said a big portion of the export basket was aromatic rice. To control volatility in the local rice market, the commerce ministry banned the export of aromatic rice in July last on the Ministry of Food's recommendation.
Before this, Bangladesh used to export around 9.5-10.5 thousand tonnes of aromatic rice to 136 countries every year, the demand for which has been growing at a moderate rate.
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Exporters are now fearful of losing this market due to the nine-month export suspension they faced.
Even if the export ban is lifted, they think regaining the market will be difficult and time-consuming.
This year, the government nominated 41 companies to export rice, including Square Food and Beverage, which was allowed to export 3,000 tonnes of rice.
Parvez Saiful Islam, chief operating officer of Square Food and Beverage Limited, told The Business Standard, "The ban has stopped us from earning foreign currency which plays a major role every year in increasing the export of agricultural products."
"Bangladeshi aromatic rice has created its market in the USA, UK, Canada, as well as middle eastern countries. However, it is going to be difficult to recapture our position in the competitive atmosphere," he added.
Not just aromatic rice, but the overall export of agricultural products has also declined.
According to the EPB, the export value of agro-products - including aromatic rice, vegetables, spices, dry food, and tobacco - in the first nine months (July-March) of the last financial year was $958 million. The export of these goods fell to $687 million in the same period of the current fiscal, shrinking by 28.31%.
Despite an increase in the export of spices and tobacco in the list of agricultural products, the export of dry food, fruits and vegetables has decreased significantly.
Exporters pointed out additional freight charges as the major obstacle in exporting agricultural products. Due to this, the cost of goods exported from Bangladesh has increased compared to India and Pakistan.
Besides, the non-availability of cargo space in the case of agro-product export and a lack of coordination are causing the country to fall behind in the race.
Mohammad Monsur, proprietor of Monsur General Trading Company and general secretary of Bangladesh Fruits, Vegetables & Allied Product Exporter's Association (BFVAPEA) told TBS, "The global supply chain collapsed first due to the impact of the coronavirus pandemic and then the Ukraine-Russia war.
"While the neighbouring countries managed to keep the freight cost at a manageable level, in Bangladesh, we saw an abnormal increase in export costs. This led to an increase in the cost of our products and a decrease in the amount of export," he added.
"Bangladesh spends around Tk120-130 for the same product India exports at Tk100. Because of this gap, we are losing the market," he further explained.
Those concerned said the price of Bangladeshi goods in the international market has increased by 20-30% due to freight charges which appear to be a major block in the current economic scenario.
Bangladesh earned $81.68 million from vegetable export in the first nine months of FY22 which has come down to $46.26 million in the current fiscal, as per the EPB data. The export value for dry food also shrank by $29 million compared to the last fiscal year.
Meanwhile, the export of powdered spices increased by 6.50% in FY23.
Apart from this, around 30% of the agro-product exported was rice which has witnessed a 45.58% decline up until now this year. Export value under this category has fallen to $304 million, although it was $559.49 million during the same period of the last financial year.
In addition, fruit export has dropped by a whopping 92%.
The highest volume of Bangladeshi fruits is exported during the harvesting season of summer fruits like mango and jackfruit. Therefore, exports are generally low in the first three quarters of a fiscal year.
Yet, fruit export saw a significant decline.
The EPB data shows the export value for fruits which was $4.28 million last year has come down to $0.37 million in the current year.
The Bangladesh Fruits, Vegetables & Allied Product Exporter's Association advisor Manjurul Islam said, "Around 85-90% of betel leaf exports are usually aimed at the UK market. Although we are yet to get the export permission for the UK, its export in other European countries is afoot after we dealt with the issues we had in this regard."
"Not just betel leaf, the UK is the export destination for most vegetables from our country," he noted.
Emphasising the importance of prompt negotiation to fix export destinations, Manjurul Islam said the lack of timely action is stopping them from increasing the export volume despite growing demand.
He also blamed the freight charges and the non-availability of cargo space at the scheduled time.
According to exporters, Bangladesh exported goods worth $1,162 million in FY22.
However this year, they are no longer confident about crossing the one billion dollar export target for agro-products.
