Arafat Ara
The ministry of finance (MoF) is scrutinising a proposal made by local frozen fish exporters to allow them to repay minimum 40 per cent of their working capital loans at the bank interest rate for 10 years.
After getting the proposal from the commerce minister, the finance minister has already sought a report from the ministry of fisheries to justify the demand.
"The commerce minister's proposal is not enough. A report from the fisheries ministry is also required," Finance Minister AMA Muhith in his note said.
Following a communication to this effect from Bangladesh Frozen Food Exporters Association (BFFEA), Commerce Minister Tofail Ahmed sent the proposal to the finance minister.
Recently the association sought loan facilities as the exporters were striving hard to run their business due to a decline in export earnings.
Exporters said they were facing a liquidity crisis as they had already lost 40 per cent of their working capital or Tk 4.60 billion (460 crore) of the total investment of Tk 11.50 billion.
They said the prices of frozen shrimps and other fishes decreased by at least 45-50 per cent due to depreciation of the euro and rouble against the dollar.
Besides, they are struggling to compete with other exporting countries which are supplying low-priced vannamei shrimp to the world market.
Amin Ullah, managing director of ARK Sea Foods Ltd, said they lacked the necessary fund for procuring fish in the current peak season. The fish procurement season lasts from May to August.
He fears that if they cannot purchase required raw materials in time, the sector would face a critical situation.
"Exporters are facing multifarious problems," said Mr Amin, also ex-president of BFFEA. Even exporters are not getting shipment orders to offer at a 50 per cent low cost, as the world market has already been flooded with low-priced vannamei shrimp," he added.
He said buyers prefer low-priced imported fish in the European countries as their currencies weakened against the dollar.
As frozen fish is a perishable item, exporters said. They have to sell them anyhow within a certain period.
According to them, nearly 90 per cent of their products are shrimp. Nearly 75 per cent of their products are exported to Europe.
There are 100 listed frozen fish exporters under BFFEA. Of them, 78 are permitted to export their products to the EU.
Export Promotion Bureau (EPB) data showed that during the July-May period of the current fiscal year (FY) 2014-15 Bangladesh exported frozen fish worth US$ 46.43 million against the target of US$ 49.68 million. Shipment also declined by more than 6.0 per cent during the period compared to the corresponding period of the previous FY.
The sector's export earnings were US$ 49.76 million during the corresponding period of the FY 2013-14.
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