Shrimp industry struggles amid raw material, financial shortages

Bangladesh's export-oriented shrimp industry is grappling with serious setbacks due to a combination of internal and external challenges, including financial constraints and raw material shortages, according to industry sources.
Over the past few years, shrimp export volumes have gradually declined, affected by global events such as the Ukraine-Russia war and the lingering impacts of the Covid-19 pandemic.
Exporters say domestic factories are facing financial strain because of rising raw material costs coupled with declining prices in international markets.
Currently, only 12 per cent of production capacity is being utilised, which has left many factories struggling to sustain operations, according to a letter submitted by the Bangladesh Frozen Foods Exporters Association (BFFEA).
To address these challenges, the BFFEA has submitted a set of recommendations to the finance ministry, urging policy measures to support the sector.
A ministry official confirmed, "We have received a letter from the BFFEA and are working on the issue."
Among the proposals, the association has suggested classifying shrimp and fish products as agricultural commodities. This would allow exporters to access benefits similar to other agricultural sectors, including a 7.0 per cent interest rate on bank loans and reduced electricity tariffs used in farming.
Industry insiders believe such measures could boost shrimp and fish production, enhance export earnings, and help Bangladesh achieve the $5.0 billion export target by 2030.
Marginal shrimp farmers are also expected to benefit.
The BFFEA has also called for the prompt release of long-standing cash incentives and subsidies.
Also, it has requested a block account facility for the transfer of outstanding loans, similar to arrangements in the jute sector, as several exporters are currently facing working capital shortages due to multiple external adversities.
Despite the challenges, shrimp exports rose 13.43 per cent to $59.79 million in the first quarter of the current fiscal year, up from $45.76 million in the same period last year.
Export earnings from frozen shrimp, the sector's main product, have fluctuated in recent years: $296 million in FY25, $328 million in FY24, $300.26 million in FY23, and $407.25 million in FY22.
Attempts to reach BFFEA President Mohammad Shahjahan Chowdhury for comments were unsuccessful, though he has promised to respond later.

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