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Wednesday, October 5, 2022

Export of agro products faces hurdles

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The export items include processed food, fresh and frozen vegetables. However, the exporters said the shipping costs rose multifold over the last one year for almost all destinations.

The price of packaging products increased 37 per cent since January this year while the dollar price rose around 25 per cent and flour price 54 per cent. The price of soybean oil has also been on the rise. All these issues pushed up the production cost and caused a reduction in business competitiveness.

According to the Export Promotion Bureau (EPB) data, the export earnings from agricultural products were USD 6.7 million in the fiscal year 2017-18 and it rose to USD 11.6 million in the fiscal year 2021-22. The growth rate was recorded at 19 and 13 per cent in the last two consecutive years.

Vegetable exporters said their exports to Europe and the Middle East have decreased due to the increase in air fares after the Covid-19 pandemic. Each kilogram of vegetables would cost Tk 150 for the shipment to the European countries through passenger flights, but it is now taking Tk 250. The air fare to the Middle East countries rose 30 t0 40 per cent.

In such a circumstance, the Indian traders have stepped in and are grabbing the  market. A good amount of garments products are being carried to the Middle East countries by air and the authorities here charge the same for carrying low-priced vegetables.

But the picture is different in India as the Indian airlines carry vegetables at a cheaper rate to the Middle East countries.

General Secretary of Bangladesh Fruit, Vegetable and Allied Products Exporters Association (BFVAPEA) Mohammad Mansoor told Point Media BD, “Indian traders are occupying our market. There were more than 200 vegetable exporters in the country before the Covid-19, but the number now declined to 100 to 150.”

Among the processed foods, there are spice, chanachur, jhalmuri, biscuits, sauces, jellies, potatoes, noodles, chocolates, various pickles, juices, fruit drinks and chips etc.

Kamruzzaman Kamal, director (marketing) of Pran Group, told Point Media BD that they are going through a tough time due to the gas and electricity crisis and rising prices of raw materials. They are trying to tackle the situation by increasing production capacity.

However, he revealed that the agricultural product export of his company did not decline despite a significant fall in overall exports.

Hifs Agro Food Industries exports a variety of processed food, beverages and spices to 18 countries. It exported processed food worth USD 3.2 million last year.

The chief executive officer of the company, Syed Mohammad Showaib Hassan, said, “The price of our products is very low. The cost of the product has increased due to the increase in raw materials price, packaging cost and shipment cost. But in most cases, the final price cannot be raised as it discourages the consumers from buying the product.”

He also said they are trying to survive by reducing the quantity and increasing the production capacity. It can be done easily by big companies, but small and medium companies are not able to follow the suit.

Noting the potential of processed food, Showaib Hasan recommended that the authorities should reduce tariffs on raw materials of export items. Besides, the dollar price should be made stable.

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