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16 June, 2019 09:54:43 AM
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Aagro-processed food business booming

Sharif Ahmed, Dhaka
Aagro-processed food business booming

Efforts by exporters to create innovative products and robust marketing have helped make processed foods popular among Bangladeshis in the Middle East, Europe and other parts of the world, say industry insiders. Export earnings from agro-processed food has grown by 40.3 per cent to USD 854.46 million in July-May of the current fiscal year (2018–19), up from USD 609.01 million a year ago, buoyed mostly by export of dry foods, tea, fruit juice, biscuits and rice.

Kamruzzaman Kamal, director (marketing) of the Pran-RFL Group, told The Independent that Pran is the country’s leading agro-processed products exporters. It adds around 70 per cent value to various food items. When asked about the reason behind Pran’s spectacular export growth, he said: “Around 10 million Bangladeshi expatriates working in various countries are the biggest market of our products. Indians and Pakistanis also like our products, and that’s another reason behind our export growth.”

Pran mainly exports agro-processed food items to India, Africa, Brazil, Ecuador, Mexico, Peru, the USA, Canada, the UK, Singapore, Bhutan, Italy, France, Germany, the Middle East, Malaysia and Australia. “Our export has been growing at a rate of 30 per cent per year. We export items such as chips and crackers, noodles and pasta, nuts and pulses, ‘chira’ (flattened rice), fruit drink, ‘muri mua’ etc. Earlier, Pran used to promote its products through importers to penetrate a new international market. But now we export and promote our products by ourselves,” Kamal said.

The idea of introducing innovative ethnic food products abroad was the main reason behind this rapid growth, he said. “We have plans to export our products to 20 new countries by 2021,” he added. Export Promotion Bureau (EPB) statistics show that Bangladesh’s dry food items, such as flattened rice, puffed rice and "chanachur", dominate half of the export basket for agro-processed food, followed by spices, fruit juice and aromatic rice.

For the last couple of years, export earnings from dry food has doubled, while earnings from biscuits have gone up three-fold. Exports of fruit juice and rice have also increased.

Improvement in areas such as supply chain and packaging is needed to make local products more competitive. “Above all, an internationally recognised testing laboratory is essential to boost exports,” said an industry insider.

AFM Fakhrul Islam Munshi, president of the Bangladesh Agro-Processors’ Association (BAPA), said the demand for Bangladeshi agro-processed food, especially dry food, was increasing in different countries, as a change in the attitude of expatriate Bangladeshis helped to increase export earnings.

Foreigners too have shown interest in these food items.

The demand of agro-processed food is not only increasing internationally, but also in the domestic market over the past few years, said the BAPA president.

Citing the reasons behind the soaring growth, he said: “The country has an enormous prospect globally in this sector, because we don’t have to import raw materials such as grains, vegetables, meat, honey, and rice of agro-food from abroad. All raw materials are available in the country. The price of raw potato per kg is Tk. 15. If we process the potato into finished product like potato chips, then 15 grams of potato will cost Tk. 15. Eventually, it means 1kg of raw potato can be sold at Tk. 1,000 only by adding value.”

So, value addition is very important, he said, which means the process of changing or transforming a product from its original form to a more valuable commodity.

Value-added agriculture entailed changing a raw agricultural product into something new through packaging, processing, cooling, drying, extracting or any other process that differentiates the product from the original raw commodity, he explained.

Another reason for the export growth, he said, was the 20 per cent government incentive on agricultural products.

“We export 14 per cent agro-processed food to India; so a huge opportunity remains untapped in the Indian market,” he said.

When asked about the local market of agro-processed food, he said the domestic market was expanding rapidly. Giving an example, he said chips worth Tk. 30 crore were being sold locally by companies every year.

Bombay Sweets, a local snack-maker, processes 100 tonnes of "chanachur" every day to meet the local demand. The local market has a huge demand for agro-processed food, he said.

Giving another example, he said the BAPA Foodpro International Expo was recently held in Dhaka, where 149 foreign firms from 15 countries showcased their modern agro-food processing machinery having the latest technology, indicating Bangladesh had an enormous potential in this sector.

BAPA has 479 members, who export approximately USD 500 million worth of products to 144 countries each year, he said.

Pointing to some of the challenges, he said: “We need adequate policy support to ramp up export earnings. The rate of interest or cost of doing business should be lower so that Small and Medium Entrepreneurs (SME) can take loans from banks at a lower rate.”

A lower interest rate would encourage more people to set up SME enterprises in the country and that would boost the rural economy, he said.

“India is a huge market for Bangladesh to export agro-processed food. We can create a bonding between the two countries. Indian companies can supply us agro-processing machinery and Bangladeshi firms can cater to the vast Indian market,” he added.

Suggesting some points, he said: “In order to dominate the global market, a few things need to be implemented, such as adoption of new technology to maintain quality and more investment in research and development, marketing, packaging and food safety.”

Bangladesh's export of agro-processed food could cross USD 5 billion in 2021, if these steps were taken,, he said.

According to the Export Promotion Bureau (EPB), the dry food sector achieved export earnings of USD 214.51 million in July-May of the current fiscal year (2018–19). This was up from USD 179.72 million for the same period in the previous financial year (2017–18), showing a robust growth of 19.36 per cent.

The products that are exported as dry food from Bangladesh include puffed rice, flattened rice, "chanachur", potato chips and biscuits.

Dry food made in the country is exported to Saudi Arabia, the United Arab Emirates, Oman, Kuwait and several other Middle East countries.

BK

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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