‘Costly production brings down exports’
Exports of processed agricultural products declined in the immediate past fiscal year for a hike in the cost of production and raw materials which eroded competitiveness in the international market, according to Ahsan Khan Chowdhury, chairman and chief executive officer of Pran-RFL Group.
"Due to price hike of raw materials, the need to import intermediate goods and hike of gas and power tariff, cost of production increased by almost 30 per cent last fiscal year," he said.
"…which pushed down the competitiveness of agriculture products in the international market," said Chowdhury during an interview with The Daily Star this week on the exports' decline.
Export of processed agricultural products rose for two consecutive years before slumping in the outgoing fiscal.
In the last fiscal year of 2022-23, processed agricultural products worth $840 million were exported, down 27.47 per cent year-on-year.
Chowdhury pointed out that the price of Bangladeshi products was higher than that in competitor countries, especially India and Pakistan, which caused buyers to lose interest.
Worldwide inflation due to the Russia-Ukraine war, increase in freight costs, and an export ban on aromatic rice are also behind the fall, he said.
According to him, the ban on aromatic rice export had a significant effect. "Pran itself accounts for around 20 per cent of the total export volume," he said.
This also caused Pran's exports to decline by around 12 per cent last fiscal year, said Chowdhury.
"…if we fail to export our agricultural products, we will lag behind in earning foreign exchange," he said.
He hopes for the situation to change this fiscal year as prices of raw materials were coming down gradually in the international market.
The government is also likely to withdraw the ban on aromatic rice export, he said.
According to Chowdhury, any such ban has little effect on the growers but agriculture product exporters suffer immensely.
Regarding increasing agriculture product exports, Chowdhury suggested that the government at first enable make raw materials to be available at an affordable price so that production costs decline.
Then a solution should be provided over the difficulties faced when opening letters of credit for intermediate and raw materials, he said.
"If it takes time to collect raw materials, it increases the cost of production," he said.
Regarding allegations that a section of exporters was cooking the books to claim cash incentives, Chowdhury suggested strong monitoring by government agencies.
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