Agricultural Exportable Products Of Bangladesh

Submitted to:Biva Arani Mallik,

Senior Lecturer,Department of Economics,

EAST WEST UNIVERSITY.

Submitted by:

Mustafizur RahmanID: 2007-1-10-097;

Rafiul AlamID: 2008-3-10-126;

Section: 5 Semester: Fall‘09

Date of Submission: 23 rd November, 2009.

Introduction

Agriculture is the single most important sector of the economy. It is the major source of

livelihood in the rural areas, where almost 80 percent of the population lives;

approximately two thirds of the labor force is employed in agriculture. Although its share

is predictably declining, agriculture (crops, livestock, fisheries and forestry) accounts for

one third of GDP and agricultural products constitute 32 percent of the total value of

exports. The crop sector, in particular food crops (mainly rice and wheat), plays a

dominant role and represents about 76 percent of the value added in agriculture, although

the share of non-crop agriculture, particularly livestock and fisheries, has increased

steadily in recent years. Rice is the predominant crop, covering 75 percent of the cropped

area and accounting for 70 percent of the value of crop output. Raw jute and jute

products, frozen shrimp and fish, and tea are the major agricultural export commodities.

While the volume of agricultural exports (except raw jute and jute manufactures) has

remained stable, frozen shrimp, frog legs and fish have emerged as significant export

items. . Bangladesh also produces tea leaves, mainly for export, although the export of

this product contributes only 1 percent of the country's hard currency earnings. In 1998-

99 the country produced 56,000 metric tons of tea leaves, but it could produce twice that

amount. The main obstacle to increasing production is in falling prices for tea in the

international market and in management and regulation problems in the industry in the

country. Fishing is another important activity in the country, contributing 4.9 percent to

the GDP (1999-2000) and providing 6 percent of the total export income. The overall fish

production was around 1.6 million metric tons (1999-2000). Bangladesh mainly exports

its shrimp to the international market.

Agricultural Trade

Food products account for some 80 percent of total agricultural imports and only a small

proportion of total agricultural exports. Jute and tea alone account for over 80 percent of

all agricultural exports, most of the remainder being composed of five products or

product groups: fruit and vegetables, tobacco leaves, various crude organic materials,

hides and skins and live animals. Figure 1 shows that agricultural exports declined

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steadily during 1985-94, from an annual average of US$190 million in 1985-87 to a

trough of US$103 million in 1994. Thereafter, they rose by 25 percent in 1995, fell again

in 1996 by 18 percent and rose rather sharply (by 34 percent) in 1997 and again (11

percent) in 1998. Despite this more recent upward trend, average annual exports in 1995-

98, at US$134 million, were much the same as in 1990-94 (Table 1), although they were

58 percent (US$50 million) higher when measured against the declining trend. Thus,

while there was no net gain in exports in the post-1994 period, there was a reversal of the

declining trend.

Period Imports Exports Net importsIncl.

jute

Excl.

jute1990-94 actual (a)

1995-98 actual (b)

1995-98 extrapolated (c)

(b) - (a)

(b) - (c)

680

1 250

646

570 (84 %)

604 (93%)

134

134

85

0 (0%)

49 (58%)

53

52

41

-2 (-3%)

11 (27%)

546

1 116

561

570 (105%)

554 (99%)

Table 1: Agricultural trade in 1990-94 and 1995-98 (average annual value, in million US$, and percentage change)

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Figure 1: Agricultural trade, 1985-98 (in million US$; thick lines are actual values, thin lines are trends for 1985-94 extrapolated to 1998)

Since jute accounts for roughly 60 percent of total agricultural exports, trade in jute

strongly influences the overall agricultural export performance. In the AoA context, then,

a pertinent question to ask is what was the experience with non-jute agricultural exports?

As regards the remaining roughly 40 percent of exports, covered by the Agreement, the

statistics show that in 1995-98 they were 3 percent lower than in 1990-94, but 27 percent

(US$11 million) higher than the extrapolated trend figure for 1995-98 (Figure 2 and

Table 4). Thus, export performance was less satisfactory when jute is left out of account.

Figure 2: Agricultural exports excluding jute, 1985-98 (US$ million)

Table 2 shows export performance for major products. Of the two major export items,

there was no change in the value of jute exported despite the 37 percent rise in export

volumes as prices collapsed. By contrast, export value of tea suffered on account of

volume. For the simple aggregate of jute, tea, fruit and vegetables and tobacco leaves,

there was a 32 percent rise in export volumes but the value of export did not change as

export prices fell by 26 percent. The export performance was impressive for the rest of

the agricultural products taken together, but they account for only 6 percent of the total.

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Recent Statistics of Agricultural Exportable products:

Export Promotion Bureau, Bangladesh

Export performance for the Month of July-September 2009-2010

Overall position Mn. US $

ProductsExport

performance for

2008-2009

Export target

for2009-2010

Strategic export target

for July-Sep.

2009-2010

Export performance forJuly-Sep

2009-2010

% Change

of export performance over export target

Export performance

forJuly-Sep

2008-09

% Change of export

performanceJuly-Sep

2009-2010Over

July-Sep 2008-09

1 2 3 4 5 6 7 8 All products 15565.1

917600.00 4329.60 3870.68 -10.60 4381.38 -11.66

Products recorded growth over last year’s performance & also over target:

Jute goods269.25 282.71 69.55 85.62 +23.11 81.40 +5.18

a) Cut flower/foliage 32.49

34.11 8.39 8.83 +5.24

8.60

+2.67

b) Agro. process food 46.68

58.35 14.35 21.32 +48.57

17.57

+21.34

c) others 53.6656.34 13.86 13.18 -4.91

8.28+59.18

Products recorded growth over last year’s performance but not over target: Raw jute 148.17 155.58 38.27 36.01 -5.91 28.15 +27.92

Products recorded growth over target but not over last year’s performance:

Agri. products: 122.29 136.51 33.58 37.50 +11.67 45.97 -18.43a) Vegetables 44.67 46.90 11.54 13.36 +15.77 15.92 -16.08b) Tobacco 40.50 50.63 12.45 17.02 +36.71 17.46 -2.52c) others 37.12 38.98 9.59 7.12 -25.76 12.59 -43.45

Products recorded decline over last year’s performance & also over target:

Tea 12.29 12.90 3.17 0.80 -74.76 5.56 -85.61Leather 177.32 230.52 56.71 45.46 -19.84 60.25 -24.55

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Frozen food 454.53468.17 115.17 101.83 -11.58

164.02-37.92

Some Agricultural Export products:

Fresh Fruits and Vegetables

Bangladeshi businessmen despite slow growth in exports of fresh vegetables and fruits

are optimistic of the potentials of these sectors. According to the recent media reports,

they believe they would be able to export more fresh produces provided they get ‘one

modern processing centre’ for testing, sorting and packaging facilities and efficient and

hassle-free airport services. They are for a modern processing centre to help them export

more fresh produces by meeting requirements of buyers, especially in the European

markets. The Bangladesh Vegetable and Allied Fruits Exporters Association have sought

technical and financial supports besides allocation of land from the government for the

centre. The fresh vegetable and fruit exporters have now been facing stiff competition

from their counterparts from Pakistan, India and Kenya in Middle-east markets including

United Arab Emirates, Qatar, and Kuwait, Pakistani and Indian exporters.

     According to local exporters, Bangladeshis in many European cities look for fresh

Bangladeshi vegetables and fruits. Earlier Britain was the major destination for local

fresh vegetables and fruits. For the past few years Bangladesh has been exporting such

consignments to Italy and France. According to the Export Promotion Bureau’s latest

data, fresh produces worth $10 million was exported in two months – July and August of

the current fiscal year, nearly 7 per cent less than the export of the corresponding period

of last year.

Frozen Fish and Livestock’s:

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Bangladesh is a riverine country having many potentials of aqua business. There are so

many canals, small and big ponds, haors, beels, rivers and the longest beach in the world.

Bangladesh is considered one of the most suitable countries in the world for aquaculture,

because of its favorable agro climatic conditions.

   

There are lots of potentials in fish sectors in both inland and salty water in Bangladesh.

Bangladesh is the fourth largest fish producing country in the world so it has to emphasis

in this sector then only the possible way to reduce export and import gap in international

trade by earning lot of foreign currency from this sector.

Jute and Jute Products:

Jute industry has played an integral role in the development of the countries economical

growth. The industry is primarily export oriented. But, with the advent of other synthetic

fibers, and increased consumer demand for apparels made from those fibers, this golden

fiber went into extinct. Generally used as a raw material for making sacks, jute is a

versatile fiber given to mankind by nature. Currently is has various applications starting

from handicrafts to technical textiles. This is the cheapest lingo cellulose fiber. Exports of

jute are both on raw fibers, and jute manufactured goods. Not until recently, world

understood the value of this natural fiber. With the growing threat of global warming and

awareness among the people to live an environmentally friendly, the fiber has regained its

importance. A surge in the export of jute products has resuscitated the industry.

   

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Tea:

Tea has been one of the major exportable items of Bangladesh since 1971. We had a

captive export market in some countries to export tea. The scenario has been changed in

recent years because of open market economy, emergence of new entrants in the world

market with low priced tea and rapid increase of internal demand. Export of Bangladesh

tea in the year 2005 was 9.09 million kg which was 30.66% less than the previous year

export of 13.11 million kg. Export earning was 742.62 million taka against 934.04

million taka the previous year

 

Other tea producing countries like India, Srilanka, Indonesia, Vietnam, Kenya and some

other African countries have relative advantages to supply better quality teas at lower

prices that makes export market extremely competitive for Bangladesh Tea.

Potential Areas for Exploring Business Opportunity:

1. Processing of Potato flakes, pulses and spices;

2. Post harvest storage, processing and packaging of fruits and vegetables; and

3. Production of organic fertilizer and mixed fertilizer.

Conclusion

In Bangladesh, agriculture has been the backbone of economy and chief source of income

for the people. Bangladesh have accelerated and changed her exports substantially from

time to time. Bangladesh needs to develop its export strategies to increase the value

added of its products. The development of a successful export market requires the

development of a performing internal economy. Efforts should be undertaken to reduce

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internal barriers to development due to weak governance, weak legal system and difficult

labor relations.

References :

1. http://www.thedailystar.net/story.php?nid=67573 ;

2. http://www.bangladeshinfo.com/business/headline_news.php?nid=18230 ;

3. http://banglapedia.search.com.bd/HT/T_0047.htm ;

4. http://www.fao.org/

5. Export Promotion Bureau- Bangladesh.

6. www.ats.agr.gc.ca

7. www.cpd.org.bd

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