Agri Biz
Fresh fruit imports fall 50pc in four months on tightened rules
Imports of fresh fruits dropped 50pc in the four months till August with the government tightening rules regarding the procurement of such non-essential items to ease pressure on depleting forex reserves.
The National Board of Revenue raised the regulatory duty on imports of various fresh fruits to 20pc from the earlier 3pc, while the Bangladesh Bank slapped a 100pc cash margin requirement for opening letters of credit for imports of such products.
As of April this year, fruit imports through Chattogram port were around 70,000 tonnes on average. In the wake of such restrictions, imports came down to 35,000 tonnes in the span of a month. The falling trend continued in the next two months and slumped to 21,571 tonnes in July, according to Chattogram customs.
In August, fruit imports marked a 55pc month-on-month rise to 33,454 tonnes, but the quantity still remained way lower than that in April.
Businesses say the overall import duty on fresh fruits has now increased to 113pc from a little over 89pc because of the 20pc regulatory duty imposed by the government in May this year.
Besides, they now have to make a full deposit before opening LCs for fresh fruit imports. Earlier, the margin ranged between 10pc and 20pc, they note.
That is why small and medium entrepreneurs have now stopped fruit imports as they are unable to maintain such a high cash margin.
Bangladesh imports various fresh fruits, such as apples, oranges, mandarin, grapes and pears mainly from China, Australia, South Africa, Brazil, Argentina, New Zealand, Afghanistan and France.
Importer Zinnat Ali, an owner of JM Trading, told, “I would import fruits worth Tk2 crore per month by making a 20pc deposit against LC opening. But the 100pc cash margin has made it impossible for small importers like me to continue with the imports.”
A drastic fall in fruit imports has affected retail sales. Billal Hossain, a retail fruit trader in Chattogram city’s Baluchara market, said prices of imported fruits have increased between Tk100 and Tk150 per kg in the last few months. At the consumer level, fruit sales have fallen by more than half.
In the span of five months, apple prices have shot up to Tk250 per kg from Tk180, malta to Tk220 per kg from Tk160 per kg, orange to Tk250 per kg from Tk200, grapes to Tk500 per kg from Tk300, he noted.
Jonaidul Haque, a fruit importer, said, “We used to import fruits worth Tk30 crore on average every month. We are now facing financial losses as our imports have dropped drastically in recent months.”
Touhidul Alam, general secretary of Falmondi fruit market traders’ association in Chattogram, said in normal times, Tk27 crore worth of fruits were sold in Chattogram per day, but sales have now halved.
Cyclone Remal has inflicted severe damage on crops across 45,590 hectares of land in the Khulna agricultural zone, causing losses worth Tk 180.24 crore, as reported by the Directorate of Agricultural Extension (DAE) in Khulna.
According to Mohon Kumar Ghosh, Additional Director of the DAE Khulna Zone, 44,148.95 hectares of farmland suffered partial damage, while 1,450.90 hectares were completely destroyed in the four affected districts: Khulna, Bagerhat, Satkhira, and Narail.
In Khulna district, Cyclone Remal affected 3,565.65 hectares of cropland belonging to 13,796 farmers, resulting in losses estimated at Tk 42.98 crore. Bagerhat district witnessed damage to 12,611.50 hectares of cropland from 39,465 farmers, with losses amounting to Tk 97.36 crore. In Satkhira, 659.7 hectares of cropland owned by 12,156 farmers were affected, incurring losses of Tk 24.42 crore. Narail saw damage to 28,763 hectares of cropland from 8,620 farmers, with estimated losses of Tk 15.47 crore.
Speaking to BSS, Mohon Kumar Ghosh highlighted the extensive damage caused by Cyclone Remal to the southern coastal areas, particularly croplands. The affected crops include jute, Aush seedbed, aush cultivated land, groundnut, chili, bona Aman, ginger, turmeric, summer melon, litchi, mango, papaya, betel nut, sugarcane, banana, winter maize, sesame, and various Kharif season vegetables such as tomato, mung bean, and banana.
Following directives from Prime Minister Sheikh Hasina, efforts are being made to support the affected farmers. “We are working tirelessly to help the helpless farmers recover their losses,” Ghosh said, adding that the government is providing incentives and regular counseling and supervision at the field level to aid recovery.
In the coming months, the affected farmers will continue to receive various forms of government support to mitigate the impact of Cyclone Remal.
The Bangladesh government has allocated Tk 385 billion for agricultural development over the next three years, aiming for an average annual growth of 10% in the sector by the 2025-26 fiscal year. This investment underscores agriculture’s crucial role in ensuring food security and driving equitable economic growth, according to the ‘Medium Term Macroeconomic Policy Statement (2023-24 to 2025-26)’.
Despite its declining share in GDP, agriculture remains vital for the livelihoods of the majority, especially in rural areas. To enhance food production and resilience against challenges, the government’s strategy includes developing high-yield and adversity-tolerant crop varieties, expanding mechanization and irrigation, and improving access to affordable inputs such as seeds and fertilizers.
The policy document highlights various initiatives aimed at modernizing agriculture through technology. These include prioritizing surface water over groundwater for irrigation to conserve resources, integrating renewable energy solutions, and utilizing remote sensing for crop monitoring.
The government continues to support the sector through subsidies, financial incentives, and technological innovations to establish a sustainable and self-reliant agricultural framework.
The fisheries and livestock sub-sectors also make significant contributions, accounting for 2.53% and 1.91% of GDP, respectively, while providing essential protein sources and livelihoods for over 12% of the population. Achievements in these areas include achieving self-sufficiency in fish, meat, and egg production, with milk production expected to follow suit. Moreover, these sectors play a crucial role in foreign exchange earnings through exports.
Looking ahead, the Ministry of Livestock and Fisheries plans to launch development projects to enhance production capacities, adopt advanced management technologies, and improve conservation efforts, particularly for young hilsa fish (‘jatka’).
Water resource management is another focal point, given its importance for sustainable agriculture. Initiatives are underway to improve surface water availability by excavating water bodies and enhancing coastal afforestation to secure equitable water shares from transboundary rivers.
With climate change posing significant economic risks, projected to reduce GDP by 6.8% by 2030, the government has prioritized comprehensive strategies to mitigate these impacts. The Mujib Climate Prosperity Plan aims to equip vulnerable sectors and communities with tools to enhance resilience and stability against climate-related disruptions.
Through these multifaceted efforts, Bangladesh is taking decisive steps to safeguard and advance its agricultural heritage amidst evolving global challenges.
The International Finance Corporation (IFC) is investing US$30 million in Pran Dairy Limited (PDL) and Habiganj Agro Limited (HAL), both part of the PRAN Group, a leading player in the food and beverage industry (F&B) in Bangladesh. This investment aims to support severely impacted businesses, particularly those reliant on imports for raw materials. The goal is to enhance the resilience of the food processing market, create jobs, foster gender diversity, and strengthen the economy.
This marks the first time IFC’s USD term loans will be utilized for working capital purposes in Bangladesh. These funds will enable PDL and HAL to sustain their operations, increase exports, and preserve over 30,000 jobs, as stated in a press release today. Additionally, IFC will assist PRAN Group in enhancing women’s participation and inclusion in the workplace through relevant policies and practices. The F&B sector plays a crucial role in Bangladesh’s economy, accounting for about 13 percent of manufacturing production value and employing 19 percent of the industrial manufacturing workforce, with a projected compound annual growth rate of 12 percent.
However, challenges such as foreign exchange shortages, high energy prices, and power shortages have disrupted the import of raw materials and constrained local commercial banks’ lending capacity. In response, IFC’s longer-term US dollar financing aims to improve access to foreign exchange, helping Bangladeshi companies navigate the crisis.
Uzma Chowdhury, director (Finance) of PRAN-RFL Group, emphasized the importance of regular access to US dollars for a net importer like PRAN Group. Given the current shortage, accessing USD funds for working capital has been challenging. IFC’s provision of scarcely available US dollar working capital will ensure the long-term stability of the company’s operations and contribute to the country’s economic stability.
As part of its advisory services, IFC will also support PRAN Group in developing the company’s smallholder sourcing supply chain in Bangladesh and identifying opportunities to decarbonize its agro-processing operations, among other initiatives.
Martin Holtmann, IFC country manager for Bangladesh, Bhutan, and Nepal, reiterated IFC’s commitment to supporting clients during crises. He stated that IFC’s financing aims to alleviate the lack of access to foreign exchange while promoting private sector growth in Bangladesh. This investment is expected to enhance food security, prioritize support for strategically important industries, diversify Bangladesh’s export base, create jobs, expand market opportunities, and enhance economic resilience.
Since 2010, IFC has invested over US$3.8 billion to help the private sector grow in Bangladesh.
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