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Letter of Transmittal

July 20, 2014

Md. Shak Forid

Assistant Professor

School of Business

Ahsanullah University of Science & Technology

Subject: Submission assignment on “Export performance of vegetables.

Dear Sir,

Here is the assignment that we assigned on the topic as per your request. The assignment has

been completed by the knowledge that we have gathered from the course „Export- Import

Management”.

I am thankful to all those who provided us important information and gave me valuable

advices. We would be happy if you read the report carefully and I shall be trying to answer

all the questions that you have about the assignment.

I have tried our label best to complete this assignment meaningfully and correctly, as much as

possible. We do believe that our tiresome effort will help you to get ahead with this sort of

venture. In this case it will be meaningful to us. However, if you need any assistance in

interpreting this assignment please contact me without any kind of hesitation.

Sincerely yours

Manas Saha

ID: 11.01.02.102

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Acknowledgement:

I would like to express my special appreciation and thanks to my course Assistant Professor

Md. Shak Forid, you have been a tremendous mentor for me. I would like to thank you for

encouraging my assignment. Your advice on both assignments as well as on my career has

been invaluable.

We would like to give special thanks to Mr. Rahim Talukder, chairman of vegetables export

of Bangladesh. Furthermore I would also like to acknowledge with much appreciation the

crucial role, who gave the permission to use all required equipment and the necessary

materials to complete the task. I would also like to thank to my team mate, who help me to

assemble the parts and gave suggestion about the task.

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Table of Contents

No. Content Page

Abstract……………………………………... 01

1.0 Introduction………………………………….

1.1 Collection of data……………………………

01

02

2.0 Export Processing…………………………...

2.1 Export Transportation……………………….

2.2 Statistics of Vegetables Export………...........

Table-1………………………………………

02

02

02

03

3.0 Cost of vegetable production……………….

Table-2………………………………………

3.1 Pricing and Costing ………………………… 3.2 Other Cost………………………………………

Table-3………………………………………

03

03

04

04

04

4.0 Problem in Export…………………………. 05

5.0 Conclusion………………………………….

5.1 Recommendation…………………………...

06

06

Reference…………………………………... 07

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Abstract

Bangladesh exported vegetables, including bitter gourd, brinjal, okra, bean, green chili,

cauliflower, worth over Tk 750 crore between July and May, which is 42.48 percent higher

than in the same period a year ago, according to Export Promotion Bureau. Bangladesh has

immense prospect for exporting vegetables to the world market and it has also produced high

quality exportable fresh vegetable. Although the share of export earning in vegetables is

increasing day by day but export is constrained by several issues. Thus the present study was

undertaken to determine the value addition, cost and return of vegetables production and

export at different levels and also suggest some policy implication for improving the present

system. The study was based on both primary and secondary data. The sample included

vegetables producer, suppliers, and exporters.

1.0 Introduction

Bangladesh is predominantly an agricultural country. Agriculture plays a dominant role in its

economy in terms of sustainable land management, food security, value addition, and

employment and export earnings. Agriculture is the single largest land resource exploring

sector. In recent years, More than 100 vegetables are produced represented by different

species and varieties. Some major vegetables are egg plants, cucurbits, yard long bean, okra,

radish, cauliflower, cabbage, tomato, beans, aroids, carrot, leafy vegetables etc.

Farmers of Bangladesh are traditionally skill, hardworking and experienced. So, many

develop countries like Malaysia, Korea & Middle East countries are importing skill farmers

from Bangladesh for producing their Agro product with low cost. Different areas of

Bangladesh contain different types of soil which are well suitable for producing different

Agro products. Since, in Bangladesh six seasons run, therefore in different season grows

different kinds of Agro products which are suitable for world‟s export market.

The most common and demandable Bangladesh origin Fresh Vegetables are: ♦ Teasel Gourd

(Kakrol) ♦ Bitter Gourd (Korola) ♦ Parval (Potol) ♦ Bottle Gourd (Laow) ♦ Staring Bean

(Borboti) ♦ Sword Bean (Shim) ♦ Ladies Finger (Dherosh) ♦ Sponge Gourd (Parul) ♦ Ribbed

Gourd (Zhinga) ♦ Sweet Gourd (Misti Komra) ♦ Eddo Root (Kachur Chora) ♦ Potato (Aalo)

♦ Green Papaya ♦ Carrot (Gajor) ♦ Tomato ♦ Cabbage ♦ Cauliflower ♦ Green Chilli ♦ Fresh

Coriander leafAt present those vegetables mostly are exported to U.K. & Middle East

countries by Air Shipment & by Sea shipment to SINGAPORE, MALAYSIA, SRILANKA,

UAE, SAUDIARABIA, OMAN, VIETNAM, PHILIPINE & RUSSIA countries. Besides

those vegetables, buyers/Importers of any country if wants to import any specific vegetable

suitable to grow in tropical climate, we are in a position to produce and export said vegetable

with best competitive price as we have well organized setup to perform said activities as per

importers demand.

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1.1 Collection of data

Data were collected from both primary and secondary sources. Primary data were collected

through direct interview with the respondents. The secondary data were collected from

renowned national and international organization, viz. Bangladesh Bureau of Statistics

(BBS), Export Promotion Bureau of Bangladesh (EPB), Directorate of Agricultural

Marketing (DAM), Food and Agricultural Organization (FAO), Statistics Department of

Bangladesh Bank, The Bangladesh Journal of Agricultural Economics, The Indian Journal of

Agricultural Economics, Bangladesh Economic Review, Hortex Foundation, Asian

Vegetables Research Development Center (AVRDC), Newspapers and Internet Files.

2.0 Export Processing

2.1 Export Transportation

Despite many problems, especially cargo shortage, the export of such perishable items

continues to increase. Biman Bangladesh Airlines is now carrying 60 per cent of total

vegetable export of the country. Foreign airliners, too, have shown their interest to carry

vegetables from Bangladesh.

2.2 Statistics of Vegetables Export

Frozen vegetables 2,176,076.46

AE: UNITED ARAB EMIRATES 35,989.31

AU: AUSTRALIA 45,203.04

BL: SAINT BARTHÉLEMY 5,877.69

CA: CANADA 12,311.42

GB: UNITED KINGDOM 1,546,181.11

IT: ITALY 3,028.44

JP: JAPAN 10,511.80

KR: KOREA, REPUBLIC OF 13,748.91

KW: KUWAIT 55,141.38

MY: MALAYSIA 13,564.65

PK: PAKISTAN 2,058.05

QA: QATAR 13,415.65

SA: SAUDI ARABIA 21,706.89

SG: SINGAPORE 796.18

US: UNITED STATES 396,541.92

Vegetables, provisionally preserved (unfit for immediate consumption)

95,160,638.18

AE: UNITED ARAB EMIRATES 7,895,425.73

BE: BELGIUM 17,848.60

BH: BAHRAIN 1,517,838.45

BL: SAINT BARTHÉLEMY 20,494.63

CA: CANADA 1,253,590.52

DE: GERMANY 534,235.47

DK: DENMARK 2,292.49

FI: FINLAND 2,460.93

FR: FRANCE 981,767.02

GB: UNITED KINGDOM 25,538,280.98

GR: GREECE 234,254.80

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Table-1: Total Export ($) vegetables from Bangladesh, 2013

Source: EPB

3.0 Cost of vegetable production

Production cost plays a vital role in the decisions of the farmers. The costs refer to the total amount of

funds used in production.

Table2. Foreign exchange earnings from exporting (Million Tk.) vegetable in 2012-13.

Name of

vegetables

Total

export

(Million

Tk.)

Total consumption

at home (Million

Tk.)

Total

production

(Million Tk.)

Export earning as % of

total value of

vegetable production

Pumpkin 11 1227 1238 0.9

Brinjal 101 11262 11362 0.9

Pointed gourd 78 1378 1457 5.4

Okra 67 434 501 13.4

Ridge gourd 11 422 433 2.6

Bitter gourd 45 1261 1306 0.4

Eddoe 56 2359 2415 0.3

White gourd 34 587 620 5.4

Cucumber 22 3594 3616 0.6

Yardlong bean 45 404 449 10.0

1.spinach 11 849 860 1.3

HK: HONG KONG 19,498.72

IT: ITALY 5,237,552.59

JO: JORDAN 9,249.23

JP: JAPAN 18,574.90

KE: KENYA 24,332.13

KW: KUWAIT 7,558,410.17

LB: LEBANON 216,694.01

MH: MARSHALL ISLANDS 1,853.37

MV: MALDIVES 39,477.94

MY: MALAYSIA 6,579,060.23

OM: OMAN 996,678.57

PK: PAKISTAN 411.61

QA: QATAR 7,633,802.52

RU: RUSSIAN FEDERATION 357.22

SA: SAUDI ARABIA 27,841,240.48

SE: SWEDEN 276,909.85

SG: SINGAPORE 664,305.05

TH: THAILAND 5.14

UK: !!! Not Defined 13,293.46

US: UNITED STATES 30,441.36

Dried vegetables 151,600.70

GB: UNITED KINGDOM 40,016.20

JP: JAPAN 87,018.43

MY: MALAYSIA 24,566.07

Dried vegetables, shelled 245,129.16

JP: JAPAN 245,129.16

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Snake gourd 22 451 474 4.7

Stem Amaran. 56 592 648 8.6

Teasle gourd 45 1165 1210 3.7

Sponge gourd 22 663 686 3.3

Latiraj 78 1585 1664 4.7

C.flower - 2640 2640 -

Cabbage 11 5023 5034 0.2

Bottle gourd 22 1100 1122 2.0

Tomato - 11542 11542 -

Radish - 6837 6837 -

C. bean 22 556 578 3.9

Red Amarnth 22 650 672 3.3

Potato 123 36584 36708 0.3

Sub-total 907 93164 94071 1.0

Export other

veg.

213 - - -

Total export 1120 - - -

Grand total - - 95191 -

Total export earnings (%) from total vegetable production 1.18

3.1 Pricing and Costing

There is a lot of confusion between the price and the cost. Many consider these synonymous.

A few points to give you mental pictures of these points are as under Price is what we offer to

the customer. Cost is the price that we pay / incur for the product. Price includes our profit

margin. Cost only gives the expenses we have incurred. Costing is the Cost Accountant‟s

privilege. Pricing is the Marketing man‟s privilege.

3.2 Other Cost

Loading charges from work to truck/ rail/ air etc.

Freight charges to port of shipment

Clearing and forwarding charges

Dock charges / wharf age/ terminal handling charges etc.

Freight charges to the destination port

Insurance charges

Insurance (both to port of shipment and destination)

Commission

Interest charges

Guarantee/Warrantee costs

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Cost items Middle East UK

Packaging 3020.00 3184.00

Packaging materials 3488.00 3730.00

Grading & loading 960.00 1064.00

Transport cost (Go-down to airport 1700.00 1870.00

Unloading 176.00 186.00

Air freights charges 111250.00 160000.00

Airway bill charges (documentation) 216.00 238.00

Terminal & Handling 2440.00 2440.00

Export performa (EXP) charges 500.00 500.00

GSP certificate charges 0.00 300.00

Phyto-sanitary certificate 0.00 200.00

Bank services 50.00 50.00

Quarantine 100.00 100.00

Metropolitan chamber offices charges 500.00 500.00

Dhaka Chamber of Commerce Office Charges 1500.00 1500.00

Clearing & forwarding charges 1000.00 1000.00

Miscellaneous 150.00 150.00

Exporters‟ office expenses 2200.00 2272.00

Salary & Wages 920.00 1020.00

Office & go-down rent 910.00 1020.00

Tele. fax, Email, Photocopy etc. 252.00 276.00

Entertainment 334.00 368.00

Commission Agent 500.00 500.00

Total Cost 132166.00 182468.00

Total Cost except air Fare 20916.00 22468.00

Price in abroad 153082.00 204936.00

Selling price in abroad 185247.00 225135.00

Profit (Tk./MT) 32165.00 20199.00

Profit (Tk./kg) 32.17 20.20

Table-3: Other cost of packaging vegetables

Source: Different Exporters of Sham Bazar, Dhaka

4.0 Problem in Export

The main problem of potato exporting to Malaysia is delayed payment. The Malaysian importers

make the payment only after receiving the goods, he pointed out. The potato is exported by ships

in the containers with cooling capacity. The fresh vegetables exporters said the main problem in

export of this perishable item is space limitation in the cargo carrying planes. Many airlines do

not show interest in carrying vegetables due to its perishable nature and many other reasons. As a

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result, the exporters often have to depend on only state run airlines Biman Bangladesh for

sending vegetables abroad.

5.0 Conclusion

This is a clear indication of the above study that Bangladesh seemed to have high prospects for

export of vegetables for its high demand to the foreign ethnic market. The export of fresh

vegetables is more profitable due to high value addition. Bangladeshi vegetables were still not

well known to the foreign consumers. To familiarize Bangladeshi vegetables to the foreigners

and foreign super markets, quality of those vegetables has to be improved by different value

addition activities like upgrading the packaging, Processing, handling, grading and transportation

system. The exporters will be able to earn a sizeable amount of foreign exchange through

exporting vegetable, especially in the Middle East countries if the bottlenecks to the export can

be minimized through different government actions. So the Government should liberalize our

vegetables exporting policy by any means. In order to do so, it may be concluded here that the

downward trend of vegetable export is to be changed to upward trend of vegetable export.

5.1 Recommendation

The Government and concern authority should take the following policy measures for exploring

the export market of vegetables:

1. To establish some “Export village” in and around some selected vegetable growing areas. For

this location studies should be undertaken to identify exportable vegetables farming areas in

terms of both high productivity and efficient distribution. The exploration and expansion of the

market for vegetables needed supervised production, procurement, and cultivation processes

conforming to the demand of the importers. A direct link has established between exporters and

the farmers by coordinating production planning.

2. Bangladeshi exporters have now been facing stiff competition from their counterparts from

Pakistan, India and Kenya in Middle East markets to send their vegetables at cheap prices

through the sea route for their close proximity while Bangladeshi exporters have to rely on

expensive air shipment. This is a disadvantage for Bangladeshi exporters. It is therefore, crucial

to look for alternatives which would help reduce the transportation cost.

3. Exporters had to pay a high rate of air freight charge for the space in the aero planes because

Bangladesh has no cargo planes. Cargo space depends largely on number of passengers in

aircrafts. So Biman Bangladesh Airlines should buy separate cargo plane. Private Airlines should

be allowed to arrange cargo flights for reducing air freight charge which will be helpful for more

value addition to the exporters.

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Reference

1. Internet-1, 11 April 2013

(http://www.thefinancialexpress

bd.com/old/index.php?ref=MjBfMDRfMTFfMTNfMV82XzE2NjAyMQ==)

2. Internet-2, 11 April 2013

(http://www.hortex.org/produces.htm)

3. Internet-3, 19 June 2013

(http://archive.thedailystar.net/beta2/news/fruit-vegetable-exports-on-the-rise/)

4. Internet-4, 03 March 2012

(http://news.priyo.com/business/2012/03/03/fresh-vegetables-export-23-cen-47466.html)

5. Internet-5, 14 November 2013

(http://bangladesheconomy.wordpress.com/2009/11/14/vegetable-export-prospects/)

6. Internet-6, 23 November 2013

(http://agriexchange.apeda.gov.in/Ready%20Reckoner/Export_Costing_Pricing.aspx)

7. Internet-7, 23 February 2013

(http://www.moa.gov.bd/)