Agricultural Exportable Products Of Bangladesh

Submitted to:
Biva Arani Mallik,
Senior Lecturer,
Department of Economics,
EAST WEST UNIVERSITY.

Submitted by:

Mustafizur Rahman
ID: 2007-1-10-097;

Rafiul Alam
ID: 2008-3-10-126;

Section: 5
Semester: Fall‘09

Date of Submission: 23rd 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

2
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
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 imports

Incl. Excl.

jute jute
1990-94 actual (a) 680 134 53 546

1995-98 actual (b) 1 250 134 52 1 116

1995-98 extrapolated (c) 646 85 41 561

(b) - (a) 570 (84 %) 0 (0%) -2 (-3%) 570 (105%)

(b) - (c) 604 (93%) 49 (58%) 11 (27%) 554 (99%)

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

3
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.

4
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.

Recent Statistics of Agricultural Exportable products:

Export Promotion Bureau, Bangladesh

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

Overall position
Mn. US $

Export Export Strategic Export % Export % Change

Products perform target export perform Change perfor of export
ance for for target ance for of export mance performance
2008- 2009- for July- July-Sep performa for July-Sep
2009 2010 Sep. 2009- nce over July- 2009-2010
2009- 2010 export Sep Over
2010 target 2008-09 July-Sep
2008-09
1 2 3 4 5 6 7 8
All products 15565.1 17600.00 4329.60 3870.68 -10.60 4381.38 -11.66
9

Products recorded growth over last year’s performance & also over target:
269.25 282.71 69.55 85.62 +23.11 81.40 +5.18
Jute goods
a) Cut 34.11 8.39 8.83 +5.24 +2.67
flower/foli
age 32.49 8.60
b) Agro. 58.35 14.35 21.32 +48.57 +21.34
process
food 46.68 17.57

5
 c) others 53.66 56.34 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 -18.43

a) Vegetables 44.67 46.90 11.54 13.36 +15.77 15.92 -16.08
b) Tobacco 40.50 50.63 12.45 17.02 +36.71 17.46 -2.52
c) 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 -85.61
Leather 177.32 230.52 56.71 45.46 -19.84 60.25 -24.55
468.17 115.17 101.83 -11.58 -37.92
Frozen food 454.53 164.02

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.

6
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:

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:

7
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.

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

8
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
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

9
__________________________________

10