Hedging the second most important export sector
Friday, 10 August 2007
THE export-oriented frozen food sector which includes mainly the export of shrimp, has been emerging as the second most important item in the country's export trade after readymade garments. Considering its future potential as an export item of value, it is often described as 'white gold' from Bangladesh. The export of shrimp has large prospects. The country earns annually about US$ 300 million from shrimp exports when various expert level studies have credibly projected that there exists the potential to increase its exports fivefold to US$1.5 billion in the span of some years from now, provided the on-going projects to develop capacities in this sector are pushed to completion at an early date.
The current level of export of shrimps is facing a number of challenges. The future of this industry depends on the entrepreneurs quickly realising what they need to do to retain the present export markets and expand their market shares. The European Union (EU) countries are by far the biggest importer of shrimps from Bangladesh followed by Japan. But incidents were noted about exporters not meeting quality requirements that led to even return of consignments of exported shrimps from the EU countries in the past. Charges were leveled against the exporters for adopting foul methods like pushing some substances inside the shrimps to increase weight or raising the shrimp amid harmful chemicals which could be detrimental to human health. In 1997, the EU slapped a ban on export of shrimp from Bangladesh. The ban was withdrawn in 1998 on conditions that the exporters would take steps to ensure product quality by improving testing standards in laboratories with the installation of appropriate equipment. While the ban and its effects have had considerable effects in shaking up the exporters and creating the incentives among them to set up the demanded facilities and subject their products to inspection, the ambit of such testing and standardisation has to be made foolproof by all means. Thus, a big consignment of shrimp was returned from Egypt recently. A team from the EU is expected to arrive in Bangladesh in the muddle of October to have field-level experience on how compliant the exporters have become since the 1988 ban. The exporters need to be ready to face the EU team with confidence and do whatever that can be done in the short period available before the coming of the EU observation team, to close any gaps in their quality control mechanisms. Understandably, they need to take this visit from the EU team most seriously because at stake is their present regular export to the EU and the aspired growth in export activity to these countries.
The USAID some time ago started a programme to train up shrimp farmers on 'virus-free shrimp farming'. The aim of the programme is to assist the shrimp framers to raise the shrimps in a virus-free environment. Not only protection from viruses, the method was shown to also increase shrimp production ten fold. This system should be made an integral part of the activities of all shrimp farmers. Even enabling legislation can be considered to ensure this happening. Another thing that the government can do very usefully is the setting up of a seal of quality (SOQ) facility. The same can be done by the government itself with participation from the exporters. The latest equipment for quality testing of frozen food should be gathered under it and exporters can be obligated to test out their products in it before exporting the same. The country's long lasting security in the export of shrimps can be realised successfully from the adoption of these two means.
The current level of export of shrimps is facing a number of challenges. The future of this industry depends on the entrepreneurs quickly realising what they need to do to retain the present export markets and expand their market shares. The European Union (EU) countries are by far the biggest importer of shrimps from Bangladesh followed by Japan. But incidents were noted about exporters not meeting quality requirements that led to even return of consignments of exported shrimps from the EU countries in the past. Charges were leveled against the exporters for adopting foul methods like pushing some substances inside the shrimps to increase weight or raising the shrimp amid harmful chemicals which could be detrimental to human health. In 1997, the EU slapped a ban on export of shrimp from Bangladesh. The ban was withdrawn in 1998 on conditions that the exporters would take steps to ensure product quality by improving testing standards in laboratories with the installation of appropriate equipment. While the ban and its effects have had considerable effects in shaking up the exporters and creating the incentives among them to set up the demanded facilities and subject their products to inspection, the ambit of such testing and standardisation has to be made foolproof by all means. Thus, a big consignment of shrimp was returned from Egypt recently. A team from the EU is expected to arrive in Bangladesh in the muddle of October to have field-level experience on how compliant the exporters have become since the 1988 ban. The exporters need to be ready to face the EU team with confidence and do whatever that can be done in the short period available before the coming of the EU observation team, to close any gaps in their quality control mechanisms. Understandably, they need to take this visit from the EU team most seriously because at stake is their present regular export to the EU and the aspired growth in export activity to these countries.
The USAID some time ago started a programme to train up shrimp farmers on 'virus-free shrimp farming'. The aim of the programme is to assist the shrimp framers to raise the shrimps in a virus-free environment. Not only protection from viruses, the method was shown to also increase shrimp production ten fold. This system should be made an integral part of the activities of all shrimp farmers. Even enabling legislation can be considered to ensure this happening. Another thing that the government can do very usefully is the setting up of a seal of quality (SOQ) facility. The same can be done by the government itself with participation from the exporters. The latest equipment for quality testing of frozen food should be gathered under it and exporters can be obligated to test out their products in it before exporting the same. The country's long lasting security in the export of shrimps can be realised successfully from the adoption of these two means.