Plight of Bangladesh seafood industry
Thursday, 23 October 2008
M. H. Bari
Once jute, tea and leather were top export earners for Bangladesh. Now it has a different export basket due to obvious reasons. Jute, the "golden fibre" of Bangladesh, has already lost its glory. Tea export has drastically fallen, while domestic consumption soared. Leather sector is not satisfactory. Readymade garments and seafood are top export earners now.
Seafood export earning increased from $3.17million in 1973 to US $515.32m in 2006-2007. Despite its spectacular growth and bright prospect, the sector is saddled with various hurdles for which it could not achieve the expected growth.
Bangladesh's seafood industries are passing through a critical juncture. The US market has slowed down, the EU is putting non-tariff barriers. Even so, Bangladesh could not find new markets. Besides, the current global recession is straining Bangladesh's seafood industry, which is facing very stiff competitions.
Bangladesh lags behind in scientific shrimp culture for which per hectare production is about 250kg compared to 1500kgs to 3000kgs in Thailand, Taiwan, Vietnam, Malaysia and even India. Bangladesh produces about 40, 000 metric tons, though its production capacity is 2, 50,000 tons.
Bangladesh's banking regulations are tougher than those in the neighbouring countries. This makes things difficult for the domestic seafood industry. For example, Indian seafood exporters sell their products to USA by way of letter of credit on condition that the payment would be made after clearance from the US Food and Drug administration, a procedure not allowed in Bangladesh. Thailand and Vietnam sell their products even without the letters of credit. They ship the goods first and then the importers open the L/Cs. But Bangladesh does not allow this either.
Bangladesh seafood exporters, as they are not so well equipped, need extra time to answer queries. They lack an integrated system which allows a single person to answer customer queries. In product quality also the country lags behind its competitors.
Seafood sells in the international market as per count or grades, that is, according to size assortment. Particular customers prefer particular product size.
As Bangladesh depends on natural production, its seafood industry cannot grade their products. And the competitors take advantage of it.
The EU Rapid Alert System for Food and Feed (RASFF) sent 34 notifications in 2004 and 2005 about 19 unauthorised substances in giant fresh water prawns and 15 types of microbiological contamination in black tiger shrimps. It created a bad impression.
Naturally produced Bangladeshi shrimps known for good texture and taste were especially liked in the EU, USA and Japan. So, Bangladeshi frozen shrimp accounts for about 3.0 per cent in the global shrimp market and is gaining a steady growth. But the Vannamei species of Thailand, Vietnam, Malaysia and Indonesia resemble Black tiger, but its yield is higher. However, in recent times, it has become a threat to Bangladesh seafood industry due to its lower price.
Bangladesh seafood exporters export traditional products, mainly raw block frozen seafood. If any flaw is detected, Bangladeshi exporters do not stand by their products in case of complaints from importers. Besides, the authorities are reluctant to address grievances of the foreign customers, which create a negative image about the exporting country.
Bangladesh seafood market is still limited to the EU, USA and Japan. Its market in Japan is reportedly shrinking. Once Japan was the single largest market for Bangladesh-origin Black Tiger shrimp. But after the 1980's its export declined due to fall in its quality, which created image crisis. At present Bangladesh's share in the Japanese seafood market is only 0.3 per cent. For the USA market, too, it lacks proper marketing strategy.
China, Indonesia, India, Thailand, Ecuador, Vietnam, USA, Canada, Mexico, Philippines, Bangladesh and Iceland are the 12 major shrimp producing countries. Shrimp production is increasing in all countries except Bangladesh.
Lacking marketing strategy, Bangladeshis are just producing and selling. The domestic industry is getting sick day by day. They do not try to hold the existing market for getting the benefit in the future. Lacking the market holding strategy, Bangladesh has already lost the Japanese market.
Australia, Middle East, Russia and China could be good markets for Bangladeshi seafood. But there are no efforts to explore these markets. The Export Promotion Bureau could make a special arrangement to enable the exporters to explore the world market.
Bangladesh's seafood industry is in a critical situation so far as its survival is concerned. Prices in the global market are on the decline since June 2007 and by now it has decreased by more than 25 per cent.
Due to slow movement in global seafood market, idle stocks were piling up for months. Bank interest is increasing, which is a hurdle for the exporters. A concerted effort is needed to save the domestic seafood industry.
The writer was associated with the seafood industries of Bangladesh for a quarter century. Currently, he is working for Global Marketing of Seafood from Bangladesh. He can be reached at e-mail: bari1963@dekko.net.bd or ramim1994@yahoo.com
Once jute, tea and leather were top export earners for Bangladesh. Now it has a different export basket due to obvious reasons. Jute, the "golden fibre" of Bangladesh, has already lost its glory. Tea export has drastically fallen, while domestic consumption soared. Leather sector is not satisfactory. Readymade garments and seafood are top export earners now.
Seafood export earning increased from $3.17million in 1973 to US $515.32m in 2006-2007. Despite its spectacular growth and bright prospect, the sector is saddled with various hurdles for which it could not achieve the expected growth.
Bangladesh's seafood industries are passing through a critical juncture. The US market has slowed down, the EU is putting non-tariff barriers. Even so, Bangladesh could not find new markets. Besides, the current global recession is straining Bangladesh's seafood industry, which is facing very stiff competitions.
Bangladesh lags behind in scientific shrimp culture for which per hectare production is about 250kg compared to 1500kgs to 3000kgs in Thailand, Taiwan, Vietnam, Malaysia and even India. Bangladesh produces about 40, 000 metric tons, though its production capacity is 2, 50,000 tons.
Bangladesh's banking regulations are tougher than those in the neighbouring countries. This makes things difficult for the domestic seafood industry. For example, Indian seafood exporters sell their products to USA by way of letter of credit on condition that the payment would be made after clearance from the US Food and Drug administration, a procedure not allowed in Bangladesh. Thailand and Vietnam sell their products even without the letters of credit. They ship the goods first and then the importers open the L/Cs. But Bangladesh does not allow this either.
Bangladesh seafood exporters, as they are not so well equipped, need extra time to answer queries. They lack an integrated system which allows a single person to answer customer queries. In product quality also the country lags behind its competitors.
Seafood sells in the international market as per count or grades, that is, according to size assortment. Particular customers prefer particular product size.
As Bangladesh depends on natural production, its seafood industry cannot grade their products. And the competitors take advantage of it.
The EU Rapid Alert System for Food and Feed (RASFF) sent 34 notifications in 2004 and 2005 about 19 unauthorised substances in giant fresh water prawns and 15 types of microbiological contamination in black tiger shrimps. It created a bad impression.
Naturally produced Bangladeshi shrimps known for good texture and taste were especially liked in the EU, USA and Japan. So, Bangladeshi frozen shrimp accounts for about 3.0 per cent in the global shrimp market and is gaining a steady growth. But the Vannamei species of Thailand, Vietnam, Malaysia and Indonesia resemble Black tiger, but its yield is higher. However, in recent times, it has become a threat to Bangladesh seafood industry due to its lower price.
Bangladesh seafood exporters export traditional products, mainly raw block frozen seafood. If any flaw is detected, Bangladeshi exporters do not stand by their products in case of complaints from importers. Besides, the authorities are reluctant to address grievances of the foreign customers, which create a negative image about the exporting country.
Bangladesh seafood market is still limited to the EU, USA and Japan. Its market in Japan is reportedly shrinking. Once Japan was the single largest market for Bangladesh-origin Black Tiger shrimp. But after the 1980's its export declined due to fall in its quality, which created image crisis. At present Bangladesh's share in the Japanese seafood market is only 0.3 per cent. For the USA market, too, it lacks proper marketing strategy.
China, Indonesia, India, Thailand, Ecuador, Vietnam, USA, Canada, Mexico, Philippines, Bangladesh and Iceland are the 12 major shrimp producing countries. Shrimp production is increasing in all countries except Bangladesh.
Lacking marketing strategy, Bangladeshis are just producing and selling. The domestic industry is getting sick day by day. They do not try to hold the existing market for getting the benefit in the future. Lacking the market holding strategy, Bangladesh has already lost the Japanese market.
Australia, Middle East, Russia and China could be good markets for Bangladeshi seafood. But there are no efforts to explore these markets. The Export Promotion Bureau could make a special arrangement to enable the exporters to explore the world market.
Bangladesh's seafood industry is in a critical situation so far as its survival is concerned. Prices in the global market are on the decline since June 2007 and by now it has decreased by more than 25 per cent.
Due to slow movement in global seafood market, idle stocks were piling up for months. Bank interest is increasing, which is a hurdle for the exporters. A concerted effort is needed to save the domestic seafood industry.
The writer was associated with the seafood industries of Bangladesh for a quarter century. Currently, he is working for Global Marketing of Seafood from Bangladesh. He can be reached at e-mail: bari1963@dekko.net.bd or ramim1994@yahoo.com