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Frozen foods exports in doldrums

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28pc of export-oriented factories run successfully
SHAMSUDDIN ILLIUS, Ctg
Publication Date: 8 January, 2018 00:00 00 AM
Media: The Independent
Original Link: Frozen foods exports in doldrums
E-paper Link: Frozen foods exports in doldrums 

The frozen foods exports sector, which surfaced in the country’s economy in the 1970s with a huge potential to boost national exports, is now in limbo.

This sector, which still holds much promise, is hamstrung by a shortage of raw materials and a lack of scientific culture. In the last few years, 62 per cent of the export-oriented fish processing factories of the country have been completely shut down and a further 10 per cent are sick and may close anytime. The remaining 28 per cent of the country’s factories are currently in operation but these also run the risk of closure if such negative growth persists in the shrimp sector.

Earlier, there were 104 export-oriented frozen foods factories in the country but now only around 30 are running. While 64 factories have closed down completely, 10 are sick, disclosed sources in the Bangladesh Frozen Foods Exporters’ Association (BFFEA).

According to the BFFEA, over 60 factories were located in Khulna and the remainder in Chittagong, Sathkira and other parts of the country. At present, only 30 factories are fully running: of these, five are in Chittagong and the remaining 25 in Khulna.

Under the circumstances, the annual exports of frozen foods have plummeted and investor connected to the sector are getting increasingly worried about the future of the industry.

Exports from this sector, too, have decreased in the last six years. In the 2011–12 fiscal year, 96,265 metric tonnes of shrimp and fish were exported but this figure come down to 68,161 metric tonnes in the 2016–17 financial year.

Businessmen in this sector said if the local supplies of export-oriented fish, including shrimp, do not increase, this sector—which once had a massive potential—would die a slow death.

“The production of shrimp is not increasing mainly because farmers are cultivating it in the traditional way. Among the export items of frozen foods, shrimp contributed 91 per cent while nine per cent came from other varieties of fish,” said BFFEA joint secretary Sheikh Sohel Pervez.

Frozen foods are mainly exported to Belgium, the UK, the Netherlands, Germany, the US, France, Russia, Japan, China and Saudi Arabia.

“Though Bangladeshi tiger shrimp enjoys good demand in international markets, our competitors are supplying shrimp at a lower cost. That is why they have been able to grab the market,” added Pervez.

By introducing semi-intensive and intensive culture systems, Vietnam, Thailand and India are cultivating the Vannamei variety of shrimp and producing some 3,0000–10,000 kg per acre of land. But Bangladeshi farmers, who mostly cultivate Black Tigers and Fresh Shrimp, can produce only some 140 kg per acre.

The BFFEA pointed out that Bangladesh was lagging behind as it is cultivating shrimps as per traditional methods while competitors in the global market—like Vietnam, Thailand and India—are cultivating the item in accordance with scientific methods.

BFFEA vice-president Devabrata Barua, who is the director of Meenhar Sea Foods Ltd, told The Independent, “At present in Chittagong, just six to seven factories out of 40 are running. We are still surviving but are in a limbo.”

“Many factories of the country have shut down. The factories which are surviving in Chittagong mostly depend on raw materials from Khulna,” added Barua.

The BFFEA also alleged that the government has not taken any initiative to promote scientific culture. It also pointed out a lack of coordination between the government and farmers. Bangladesh’s farmers face many a challenge—financial crisis, disruptions in electricity supplies, poor communications, lack of expert doctors—when they try to go in for scientific culture.

“There are 104 export-oriented frozen foods factories. Of these, in toto, 30 are fully running, but some 40 to 45 factories are somehow surviving,” said BFFEA sources.

“At present, the processing capacity of the factories in Bangladesh is about 400,000 lakh metric tonnes. But only 1,35,000 metric tonnes of shrimp are produced in Bangladesh. Owing to the acute shortfall in shrimp production, nearly 80 per cent capacity of our factories remains unutilised. As a result, most of these have become sick and bankrupt,” said BFFEA’s secretary in Chittagong, SM Morshed Zafar.

“The only way to come out of this situation is by increasing the production of shrimps. This can be achieved by introducing the processes of scientific culture, known as the semi-intensive and intensive methods,” added Zafar.

Latifur Rahman, deputy director (Chittagong division) of the Department of Fisheries (DoF), told The Independent, “The fish processing factories are not getting raw materials. Moreover, we are not getting shrimp as before from natural resources like the sea and the rivers in this region. There is also a dearth of investors willing to go in for cultivation of shrimp by scientific methods.”

“Though Bangladeshi fish enjoys demand in the global market, this sector is facing problems because of low production,” he added.

The businessmen said that during the mid-1970s, the export-oriented frozen fish trade started in Chittagong. Initially, a company named ‘Bengal Fish and Frog Leg’, located in the city’s Sagorika area, started exporting frozen fish abroad.

Soon after that, two other companies—Meenhar Sea Foods Ltd and Apex—entered the frozen fish exports sector.

Inspired by their success, one by one, several frozen fish factories were established in Chittagong because of the availability of shrimp and varieties of marine fish in the sea and in the coastal areas of Chittagong and Cox’s Bazar. Many export-oriented frozen fish industries developed in this region and other parts of the country in such a manner.

Traders have made good profits in this sector from the 1970s to 1990s. After that, the sector began to collapse. Many of them are slowly starting to lose business because of losses and loans.

“In the Chittagong region, shrimp is produced mainly in Cox’s Bazar. But the production in this area is not the same as before,” added Zafar, while explaining the reasons why the factories have shut down.

“A lot of caution has to be exercised in the cultivation of exportable shrimp. This requires a lot of hard work. That is why farmers are tending towards salt cultivation rather than shrimp cultivation. There are 1.02 lakh acres of land for shrimp farming in Cox’s Bazar. Farmers are now mostly cultivating salt in these lands rather than shrimp,” added Zafar.

The businessmen said though there is enough land for the cultivation of the shrimp and there are many experts in Bangladesh, the land is not being used in a planned manner.

The government allocated 7,000 acres in 1986 at Chokoria in Cox’s Bazar and distributed it among farmers, after dividing the land into 883 plots, for cultivating shrimp. But shrimp is cultivated here in accordance with traditional methods.

The farmers complained that they cannot go in for the scientific process because they lack capital. The BFFEA said in Chokoria, farmers can produce shrimp worth some Tk. 40 crore. But if they go in for scientific cultivation, they would able to produce shrimp worth over Tk. 1,500 crore in just Chokoria.

The DoF, too, admitted this. As DoF deputy director Latifur Rahman explained, scientific culture is a costly process. “Because of the shortage of capital, farmers do not go in for scientific culture,” he added.

There are enough knowledgeable people in Bangladesh to implement this technology. It is possible to implement the plan within five years but the DoF has allegedly not taken any initiative to encourage farmers to go in for scientific cultivation.

The BFFA said if the government gives loans to the farmers and strictly monitors the sector, the sector will be revived soon.

However, a couple of farmers in Cox’s Bazar are cultivating shrimp in accordance with the scientific method with their personal efforts. They currently cultivate some 3,000 kg of shrimp on just a single acre of land.

Anisur Rahman, owner of Unique Aqua Culture at Hnila in Teknaf, said, “I cultivate shrimp on 20 acres of land by the semi-intensive method and produce over 2,600 kg per acre. My cost is about Tk. 550 per kg of shrimp produced, with each kg being sold for about Tk. 1,000.”

“I was working at a job in a private company, but I left that job and now I am working full-time in my shrimp field and booking good profits,” added Rahman.

Shamsuddin Illius
Shamsuddin Illius is a print and online media journalist. He has been working in the field (fulltime) of journalism since 2010. He is very much passionate about journalism since his early age. Currently he is the Bureau Chief-Chittagong at The Business Standard.

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