China will provide 100 per cent duty-free market access to Bangladesh from December 1 this year, according to a statement from the Chinese Embassy in Dhaka, released on September 23.
The announcement follows Chinese President Xi Jinping’s pledge at the China-Africa Summit on September 5, where he declared that least developed countries (LDCs) would be granted full duty-free access to Chinese markets.
Bangladesh will begin benefiting from the 100 per cent duty-free market facility from December 1, a date that coincides with the anniversary of the establishment of diplomatic relations between Bangladesh and China.
In 2022, China extended duty-free access to 98 per cent of Bangladeshi products, including 383 new items, with leather and leather goods among the sectors that gained from the agreement. Prior to this, in 2020, 97 per cent of Bangladeshi products had already been granted duty-free access.
Chinese investors eyeing duty-free access
Chinese investors have expressed keen interest in leveraging the full duty-free benefits to expand their investments in Bangladesh and export products to China. Cheng Ma, co-founder of Dhaka-Taka (Beijing) Trading Corporation Ltd, is considering investments in the fisheries sector to take advantage of the new opportunities.
In July this year, Bangladesh hosted an investment summit in Beijing, which Cheng Ma attended. The young Muslim Chinese businessman expressed his interest in investing in Bangladesh while speaking to this correspondent from The Business Post.
“I met a Bangladeshi friend while studying at university in Beijing,” Ma said. “I used to listen to many stories about Bangladesh from him. When I visited Dhaka in February this year, I was surprised by how much everything had changed,” he added.
Modernising shrimp farming
Following his visit, Ma decided to invest in Bangladesh, specifically targeting the import of black tiger shrimp from the country. “During my last trip, I went to Khulna to observe black tiger shrimp farming. I was truly impressed by how Bangladeshi farmers cultivate the shrimp.”
“This type of shrimp is usually fed artificial food, but I saw farmers in Bangladesh using natural food. Additionally, I observed the farmers’ reliance on the full moon and the black moon for shrimp farming. This aspect is a matter of research for me,” Ma noted.
Cheng Ma said that, as part of his investment plan in Bangladesh, he aims to collaborate with local farmers and farm owners. “I plan to introduce modern technology that will simplify and reduce the costs of shrimp farming,” he explained, noting that this would include the establishment of shrimp solar stations.
“I have the capability to invest thousands of dollars, along with valuable skills,” Ma said. “Currently, Chinese consumers are spending around $2 billion on black tiger shrimp, indicating substantial market potential for this product in China,” he added.
The Chinese businessman pointed out that, at present, the volume of black tiger shrimp exported from Bangladesh to China is relatively small. “I see significant potential to increase the export of this species, and I am eager to seize this opportunity,” he remarked.
Export performance overview
According to data from the Export Promotion Bureau (EPB), during the July-May period of FY24, Bangladesh exported shrimp worth $364.78 million to the global market. This figure represents an increase from $300.26 million in FY23, but a decline from $407.25 million in FY22 and $383.16 million in FY21.
Bangladesh ranks ninth in the global shrimp market, with 59 per cent of its shrimp exports going to the European Union. The shrimp farming area in the southern region of the country spans approximately 1,80,000 to 1,85,000 hectares. Additionally, there are 40 hatcheries located in Cox’s Bazar and 24 shrimp processing plants across Bangladesh.
Light Castle, a local research firm, said in its report, “Bangladesh Shrimp Sector: Transitioning Towards Sustainable Growth,” that the Bangladeshi shrimp sector, once labelled as the next big export driver, is now at a crossroads.
Two distinct schools of thought have emerged regarding the future of the industry— introducing Vannamei (white-legged) shrimp production into the Bangladeshi shrimp ecosystem or focusing on Monodon (black tiger) shrimp as a premium natural product in the global market.
The shrimp sector in Bangladesh provides livelihood opportunities for millions of people residing in the southern part of the country. The future of this sub-sector will heavily depend on collaborative partnerships among policymakers, value chain actors and development partners.
In 2022, Bangladesh achieved heritage certification for black tiger shrimp (Monodon), marking a significant step towards positioning “Bagda” shrimp as a premium choice for export worldwide. However, achieving premium pricing will require a focus on traceable backward linkages, compliant farming and processing, adherence to best practices among value chain actors and ensuring minimal environmental degradation.
