Report on

Frozen Food Export (shrimp) of Bangladesh

SUBMITTED TO:

Prof. DR. Raisul Awal Mahmood

SUBMITTED BY:

NAOMI NITEE SARKER

ID:1911171
Contents
INTRODUCTION...........................................................................................................................................2
LEVEL OF EXPORT OF FROZEN FOOD...........................................................................................................4
DESTINATION OF FROZEN FOODS...............................................................................................................9
REASON FOR EXPORT OF FROZEN GOODS................................................................................................10
CHALLENGES FACED..................................................................................................................................12
OVERCOMING THE CHALLENGES...............................................................................................................13
CONCLUSION.............................................................................................................................................14
REFERRENCE..............................................................................................................................................14
 INTRODUCTION

Known as the country of Rivers, Historically Bangladesh’s economy is dependent upon the
Inland water resources. Being fortunate with rivers, rivulets and tributaries, these natural gifts
provides the country an abundant resources of large varieties of fish species. Of which 260
belong to freshwater fish species, 24 are categorized as inland water prawn species. In addition,
475 species of marine fish, 36 species of marine shrimp and 12 species of exotic fishes are also
found here.

Being an agricultural based country in south Asia; farming has been the mainstay of around 80
million people (FAO, 2014). In reality the majority of the population are involved in different
subsector of agriculture. Crops and horticulture, livestock and poultry, forest and fisheries are
some of the subsectors that has been significantly contributing our economy by providing food,
livelihood, foreign earning, creating employment and supplying raw materials for industrial
development.

Frozen food is one such element of the agricultural subsectors in Bangladesh. If we consider the
total agriculture export, frozen food contributes around 23%. Additionally, frozen food export is
the second largest export item of Bangladesh, contributing to up to 3% of total export and
contributing 3.78% in GDP which can be evaluated as 400 million of foreign currency yearly.
Furthermore, The Bangladeshi frozen food market is growing at a CAGR of 6.2% during the
forecast period (2020-2025)

Out of total frozen food export, shrimp along contributes approximately 90%. The single sub
sector shrimp also contributes near about 4.43% of the GDP. Additionally, Bangladesh
contributes to 2.5% of the worldwide shrimp market. As the requirement and demand of
shrimp is increasing constantly, there’s a possibility just the shrimp industry alone could
contribute up to 10% of the National GDP as well as create employment opportunities for 12
million.
A significant area of southern part is under cultivation of shrimp culture. There are 148 (88 are
registered by GOB) sea food processing plant in our country. Which total processing capacity
are 3,00,000 M. Tons per year, but those processing plants are utilizing only 14%-16% of their
total capacity due to significant inefficiencies in various steps of the value chain

Notwithstanding the fact, however, this frozen food subsector is now facing many natural
digester and manmade challenges like lack of infrastructural development, lack of standard
labor practice and lack of government effective policy and political turmoil. This article focus on
manmade challenges, analyzing the export earnings from frozen foods of Bangladesh, key
export items and destination, strength and quality of Bangladesh frozen foods, prospect,
challenge and the way out from the confront environment for sustainable development.

A significant area of southern part is under cultivation of shrimp culture. There are 148 (88 are
registered by GOB) sea food processing plant in our country. Which total processing capacity
are 3,00,000 M. Tons per year, but those processing plants are utilizing only 14%-16% of their
total capacity due to significant inefficiencies in various steps of the value chain. The sector
suffers from a lack of vision and strategic direction. An integrated strategy at each stage of
value chain for sustainable growth and to respond emerging trends in the competitive global
market place can increase the shrimp export earnings of Bangladesh

The purpose of this report is to identify the opportunities and obstacles of the export of Frozen
food from Bangladesh. We look to identify the particular problems and issues faced in the
frozen food industry specifically the shrimp industry and try to understand how this issues can
be mitigated.
 LEVEL OF EXPORT OF FROZEN FOOD

Globally the frozen food industry is on a positive and upwards curve of expansion. In 2010
alone, the global frozen food industry recorded close to 4% growth in 2010 exceeding $192
billion. By the end of 2015 it further had 19% expansion exceeding $228 billion by end of year.
In terms of volume the market had 14% growth in the same period to reach almost 43.5 billion
kilograms.

The domestic frozen foods market is also growing at a rapid pace with the expansion being
almost 30% in 2011-12 over the preceding fiscal year. Currently, the market is projected to be
at BDT 2,680 million+. Even if the existing growth persists, current size of the market would be
BDT 3,400 million+

It is predicted that Bangladesh is able to increase foreign exchange earnings of Tk 50000 million
annually by converting 25% of her existing shrimp cultivable land into semi-intensive farming.
The export sector plays an imperative role in determining the rate and structural pattern of
development of any country (Matin, 1991). The main cultured species is the tiger shrimp
(locally known as bagda shrimp) of which the technical name is Penaeus. It is a marine shrimp
and is cultivated in salty water. The next most important cultured species for export is the fresh
water variety, locally called golda, technically known as macrobrachium rosenbergii. The shrimp
industry provides direct employment to over 600,000 people who in turn support well over 3.5
million dependents

Bangladesh in the world trade economy has been establishing itself as a major player by
producing various manufacturing goods i.e. garments, jute and jute related goods, leather and
leather related goods along with frozen foods. The Bangladesh readymade garment is taking
place the second top position in the world market. The garment sector has taken 81% share of
the total exporting items from July 2014 to January 2015 and compare with others the frozen
foods only 2% of its kind, however, the frozen foods of Bangladesh has been seeing a growth
because of goodwill and quality.

Since July, 2014 to January, 2015, frozen food contributes only 2% from the total export of
Bangladesh. From the following table 4 has shown that US$ 429.35 million frozen foods has
been exported from July to February, 2014-2015. And it was 6.32% down trend compare with
the previous year of the same time. Even though, the total target of various exporting items
from July- February, 2014-2015 was $ 21.28 billion however, it was actually achieved $ 20.31
billion. Despite of 4.56% downward trend, shipment grew 5% year- to- year in February 2015.

Sl Items Export Percent

1 Garment $16.51 B 2.56%
2 Leather $569.01 M 6.4%
3 Jute $740 M 0.54%
4 Frozen Foods $429.35 M 6.32%

The frozen foods export from Bangladesh is on an incremental trend. Even though this increase
curve has not remained straight from fiscal year 2000-2001 to 2013-2014 and has been through
both up and downs, Still in the recent times it has shown a positive increment. In the fiscal year
2000-2001 the frozen food exporting value was $ 363.23 million, but the next fiscal year in
2001-2002 export earning was $ 276.11 million only. The following fiscal year 2002-2003 to
2007-2008 the export earnings trend was remain upward. The fiscal year 2008-2009 to 2009-
2010 was shown to have poor export earnings from frozen food. However, in the fiscal year
2010-2011, the export took a turn to the positive . The following fiscal year 2011-12 and the
fiscal year 2012-2013 the export earnings from the frozen food remain poor. None the less, in
the fiscal year 2013-2014 export earnings from frozen food generated a record export of more
than $ 638 million
The Government of Bangladesh recognized the potential of Shrimp industry and under the
second Five Year Plan (FYP) starting from 1980 to 1985 (Haque, 1994) set Bangladesh Frozen
Foods Exports Association (BFFEA) in 1984 to increase and monitoring the shrimp production.
The BFFEA is the only trade regulatory body for the members of Fish Processing Plants in
Bangladesh. From the very beginning of the BFFEA, it has been working to endorse and shield
the interest of Frozen food processors, Packers and Exporters in the Country. The BFFEA is also
dedicated to set up and uphold congenial relation with the prospective foreign buyers, business
association and the chamber of commerce and industries to expand export marketing of Frozen
Foods to the world markets. There are ten frozen foods exports items from Bangladesh, mainly
to European Union, America (North and South America), Russian, Middle East and Asian
markets

Frozen shrimp are the main goods from these selected key items and is the second highest
exporting items from Bangladesh. About 84% of frozen shrimp has been exported in the fiscal
years 2012-2013 from Bangladesh to the world market, whereas only 16% of frozen fish has
been taken place in the same fiscal year

Export

16%
Shrimp
Fish

84%
Here we can see the total level of fish and shrimp export in both quantity and value.

DESTINATION OF FROZEN FOODS

If we wish to identify the exporting destination we can see that in the fiscal year 2012-2013, the
new booming markets were USA, Russia and France where export was estimated around
20488000 US$, 18964000 US$, and 16910000 US$, respectively. In the following fiscal year
2014-2015 from July-December Canada was newly identified market. It became the 14 th export
destination of frozen food, in the year 2014-2015, as frozen foods were exported worth
3068000 US$ from July– December. According to the Export Promotion Bureau (EPB) data, the
maximum frozen food exporting area from Bangladesh to the world market during the period
July-December 2014-2015 were Belgium with 80518 thousand US$, Netherlands with 62132
thousand US$, UK with 55742 thousand US$, Germany with 38785 thousand US$, USA with
20488 thousand US$, Russia with 18964 thousand US$, France with 16910 thousand US$. The
other flourishing frozen food markets and exports were China with 7306 thousand US$,
Denmark with 5717 thousand US$, Saudi Arabia with 5163 thousand US$, Portugal with 5015
thousand US$, Hong Kong with 3443 thousand US$, and UAE with 3029 thousand US$. As we
can see this sector is being introduced to new market, it has a good prospect going forward.

REASON FOR EXPORT OF FROZEN GOODS

Natural Resource is the significant contributing factor behind the export of Frozen goods
specially shrimp production. As the country is rich with abundant water bodies, Bangladesh
possesses fishery resources in two dynamics.

1.Inland Water Body (47,03,658 Ha)

2. Marin Water Body (68, 480 S. Nautical Mile)

At present, the world oceans and all the open inland waters produce 50% of world fish and
remaining 50% producing from aquaculture. Even though, in 1950, ≈ 3% of the world fish
production was of aquaculture origin. In Bangladesh, more than 55% aquaculture supplies out
of the total national production of fish from all sources. And 80-85% of all fisheries export is of
aquaculture origin. Near about 80% of the global aquaculture production came from Asian
countries including Bangladesh. Bangladesh fisheries sector road map 2015 projects a total
production of 3.54 million metric tons of fish of which 57% will be of aquaculture origin. And
out of the total export earnings from shrimp export, aquaculture product contributes at least
90%. Therefore, it is no surprise that Shrimp earned 378 million US dollar in the year 2003-04.
Furthermore, During the last ten years, Bangladesh has earned international credibility by
responding to the food-safety and quality requirements of its destinations, mostly, the United
States and the European Union countries. As a result, 65 processing plants have been approved
by the European Commission for exporting shrimp and fish products to the European Union
member states. Recently, Bangladesh has also initiated projects for implementing ‘traceability’
regulations of the EU. III. Moreover with the assist from. Swiss Import Promotion Programmed
(SIPPO), Bangladesh has drawn attention to organic production of shrimps. A larger number of
export processors are now producing greater amount of value-added products such as
individually quick-frozen, peeled and divined, and butterfly-cut shrimps as well as cooked and
semi cooked products. Therefore, Bangladesh has been able to establish itself in the frozen
food & fisheries sector as it favorable business environment
 CHALLENGES FACED
1.Infrastructural Development.:

Infrastructure is a key component for productivity and growth. It has long been proven that a
lack of infrastructure can affect growth of a country’s economy. On the other hand, better
infrastructures not only improve the economy but also educational sector, health sector and all
other pertinent sectors as well. Bangladesh has a sever lack of access to infrastructure in the
South Asia. And the situation is worsening. Within the worse infrastructural situation,
communication i.e. the total road networking infrastructure, port, electricity is the main
problem in Bangladesh. According to World Bank estimation in 2013, Bangladesh needs to
spend 74 to 100 billion US dollars for the development of worse infrastructure within 2020. As
per the report, per year Bangladesh require to provide between 7.4 to 10% (Hussain, 2015).
Currency Devaluation. About 90% of Bangladesh frozen foods have been exporting to the EU,
USA and other developed countries

In addition, due to political unrest merchants could not receive frozen food order. There are
also the issue of transportation of frozen foods from fish processing zone to port. In 2013- 2014
Bangladesh exported 55 074 tons of frozen food, including shrimp. Whereas near about 70% of
Bangladesh frozen food exports to European Union and Russia. due to continuing political
unrest, frozen food sector is losing business inside the country

2.Currency Devaluation:

Bangladesh’s frozen food industry has been incurring loss due to currency devaluation with
Euro and the Russian ruble against the dollar. So a quick fall of the euro and the Russian ruble
against the dollar, coupled with the ongoing political turmoil at home, has hit the frozen food
industry hard. In September 2014, each euro traded for Tk. 110, nevertheless, at present it is
trading at Tk. 87 only, it means about 21% decline in worth (Daily Star, 2015). Price Collapse.
3.Price Collapse

High bulk of frozen foods i.e. frozen shrimp (black tiger) and fish goes to EU markets. However,
the price of frozen shrimp and fish drooped 42% to $ 5.25 a pound (16-20 pieces) from August
2014. According to Bangladesh Frozen Foods Exporters Association (BFFEA), they are compelled
to sell at lower prices to retain the international buyers. According to the BFFEA, largely
shipment fell 5% year-on-year to 32 800 tons in July-January of this fiscal 2013-2014 and 2014-
2015. According to export Promotion Bureau, earnings were down 5% to US$ 397.6 million
during the period compared to the same period a year ago.

4. Lack of foreign Investors:

There are is a severe lack of foreign investors in this sector. However, As Bangladesh has huge
human resource and they can be employed by poor labor cost, foreign investors should be
attracted but due to government policy this has not been the case.

OVERCOMING THE CHALLENGES

The frozen food of Bangladesh has the potential for sustainable growth. But in order to attain
the vision and potential there has to be a plan to overcome the challenges and crisis. For these
the following steps could be taken.

 To create new policy, new exporting destination, introducing to the world market as a
new product
 To create an environment and policies to attract foreign investors
 Government can allocate soft loans with low interest for shrimp farmers
 Infrastructure development is most essential to overcome the crisis of frozen food. The
road and highway communication development from shrimp and fish farming area to
packet processing area and packet processing area to port area should be smooth or
have to create alternative way to reach the goods within a short time.
  Providing proper environment for fisheries and bio-secure management practices
 Providing technological support and training for cultivating and processing fish for
shrimp and fish famer in Bangladesh.
 Reduction of electricity bill, exemption of tax and duty on shrimp feed and introduction
of cash incentive for shrimp farmers may consider for the sustainable development of
this sector

CONCLUSION
Bangladesh, with a large deltaic flood plain has a long tradition of fishing and shrimp culture. In
recent decades, due to an increased international demand, shrimp has become one of the most
important export products. In export earnings 85% of this is earned through export of shrimp.
The government has declared shrimp cultivation a priority industry. If we look at the global
market today America is the biggest shrimp buyer in the world, importing more than 5,000,000
tones in a year. Japan imports around 250,000 tones and four European shrimp importing
countries are France, the UK, Spain and Italy together they import near about 50,00,000 tons
annually. About 75 per cent of farmed shrimp is produced in Asia. Despite of this huge demand
and our scope of the world market The growth of shrimp production in Bangladesh is not
remarkable. If we can develop this sector it can greatly contribute to our poverty mitigation,
employment generation and export earnings. However, in order to materialize that dream we
need to overcome the challenges eg. labor issues, environmental sustainability, and food
safety. So therefore both the government and the private sector needs to come together to
keep this industry stable and sustainable developed

REFERRENCE
1. BFFEA (2010) Annual report of Bangladesh Frozen Foods Exporters Associations Dhaka,
BFFEA monthly newsletter, January, p.5, Bangladesh
2. Shrimp Market Report (2010). www.vietfish.com/En/detail.php?id=9&&actitle=2470,
Accessed date: March 10, 2022
3. EPB (2006). Bangladesh Export Statistics, Export Promotion Bureau, Ministry of
Commerce, Government of the People’s Republic of Bangladesh, Dhaka
4. Iqbal Ahmed, (2010) chairman and chief executive of Seamark (BD) Ltd, “Frozen food:
Next big export “Monday, May 17, 2010, The daily Star
5. The daily Star, Sunday, July 11, 2010, Star Business, p1
6. Bangladesh Frozen Foods Exports Association (BFFEA). (2013) Basic Information of
Bangladesh Frozen Foods Industry. Accessed Date: March 10, 2022,
http://www.bffea.net/

7. Wing, L. A. (2022, January 4). Market Insight: Bangladesh Frozen Food Sector.
LightCastle Partners. https://www.lightcastlebd.com/insights/2015/07/market-insight-
bangladesh-frozen-food-sector/
8. Bangladesh Frozen Food Market | 2022 - 27 | Industry Share, Size, Growth - Mordor
Intelligence. (2021). Www.Mordorintelligence.Com.
https://www.mordorintelligence.com/industry-reports/bangladesh-frozen-food-market