Light year gap between exports and imports of agri products

Bangladesh has a diversified agricultural product basket with immense export potential, but the country’s agro exports made up only 4.54 per cent of imports in FY22 – indicating a significantly wide gap.

Bangladesh imported over 190 lakh tonnes of agricultural products in the last fiscal year, against imports of only 8.64 lakh tonnes, shows data from the Department of Agriculture Extension (DAE).

Industry insiders point out that as an export-led economy, it is alarming for Bangladesh as the exports of agri-based products are not increasing as expected.

Three years back in FY19, Bangladesh exported 12.56 lakh tonnes of agro products, and imported 145.13 lakh tonnes. Imports of such goods rose by 30.91 per cent between FY19 and FY22, while exports dropped by 31.21 per cent during the same period.

Imports increased gradually, going up from 167.55 lakh tonnes in FY20 to 171.65 lakh tonnes in FY21. Meanwhile, exports rose a bit from 7.92 lakh tonnes in FY20 to 8.36 lakh tonnes in the last fiscal year.

Cereal was on top of Bangladesh’s import list. Among the top import items, the country imported around 83.58 lakh tonnes of cereal in FY22, followed by 28.72 lakh tonnes of edible oil type products, 27.59 lakh tonnes of fibers, 17.66 lakh tonnes of pulses, 10.56 lakh tonnes of spices, 7.91 lakh tonnes of fruits and 7.46 lakh tonnes of crop cake.

Under the agro segment, jute fibers are the top export item of Bangladesh. The country exported 2.95 lakh tonnes of fibres in FY22, followed by 2.06 lakh tonnes of oil, oil seeds and derived product, 1.06 lakh tonnes of vegetable, 0.55 lakh tonnes of dry food, 0.077 lakh tonnes of frozen food and 0.07 lakh tonnes of fruits.

Why are agro exports so low?

Experts and exporters say vegetables, and processed, frozen and dry food items have high export potential, but the huge domestic market demand is one of the reasons behind low export volume.

Anwar Faruk, a former agriculture secretary, said, “Bangladesh produces a surplus amount of vegetables. Both the fresh and processed vegetables have a big potential for exports.

“The government should explore new markets, build lab facilities and ensure policy support to help farmers and exporters tap into this segment.”

He added, “Bangladesh has been posting data claiming the country’s production of agro goods such as cereal and vegetables are going up, then why are imports under this segment rising steadily?

“The agro production data must be vetted more carefully.”

Discussing the challenges, President of Bangladesh Fruits, Vegetables and Allied Products Exporters’ Association SM Jahangir Hossain said, “Compared to India, we have to pay an additional Tk 50 – Tk 60 per kg in freight charges to send vegetables to different destinations.

“On the other hand, we have to collect fruits for double the price compared to our neighbours. Importers will always try to source goods from cheaper destinations. This is why we are lagging behind in this sector.”

He added that the airlines do not want to carry perishable goods, and they usually have available booking to carry readymade garment items, which is another hurdle for agro exporters.

Pran-RFL, ACI and other big conglomerates are focusing more on processed food, sensing its huge demand in both domestic and international markets.

FH Ansarey, President of ACI agribusinesses, said, “We are putting more emphasis on food processing and other conglomerates are doing this as well. However, food processing and exports is a new idea for most of the Bangladeshi exporters.

“So it is taking time to boost the export of these items. On the other hand, our domestic market is huge with more than 17 million people.”

What can be done?

Industry insiders believe processed food will play a vital role in earning foreign currency in Bangladesh’s agriculture sector.

ACI’s Ansarey said, “Netherlands is the top agricultural product exporter in the world, but they do not produce all those products. They import and process them, add value and then export those to different countries.

“We need to do the same to boost exports and earn more foreign currency.”

Recommending a few ways to help boost fruit and vegetable exports, SM Jahangir Hussain said, “If the government restricts fruit imports, farmers will be encouraged to produce more fruit. This in turn will help boost fruit exports.

“The government should fix a unified freight charge at a lower rate for perishable goods. In the meantime, a quota needs to be fixed for carrying perishable goods, as airlines prefer RMG to such items.”

Benojir Alam, director general of the Department of Agriculture Extension (DAE), said, “To boost agricultural product exports, farmers need to produce pure and safe products.

“There should be no harmful chemical, microbial contamination and other types of unhygienic substances in those products. Moreover, the compliance category is different for different destination countries.”

He continued, “We are working with the farmers at the field level on implementation of safe production, with the aim to boost exports. Agro goods producers should also put more emphasis on attractive packaging.”