Hike in airfreight puts vegetable and fruit exporters in trouble

Fresh vegetable and fruit exporters are apprehending a drop in sales of perishables following a hike in cargo freights, particularly by Biman Bangladesh Airlines, last month.

Biman, the state carrier, hiked cargo fares in August anywhere from 56 percent to 150 percent depending on the routes compared to that six months ago.

Bangladesh Fruits, Vegetables and Allied Products Exporters Association sent letters in this regard to Finance and Commerce Adviser Salehuddin Ahmed and Biman on August 25.

The exporters have to pay anywhere from 0.86 cents to $1.75 per kilogramme for destinations in the Middle East, including Saudi Arabia, where most Bangladeshi workers migrate to, it said.

However, it was around 0.55 cents to 0.70 cents in February, it said.

Likewise, Biman hiked fares by 143 percent to $3.65 per kilogramme on the Hazrat Shahjalal International Airport to London route in February.

"It is going to hurt our exports significantly. Fuel prices have not increased so there is no reason for the sudden spike in fares," said the association's general secretary, Mohammed Monsur.

Exports of vegetables and fruits have been falling for the last three years, said the association.

Bangladesh shipped 124,500 tonnes of fresh farm produce, the highest in a decade, in fiscal year (FY) 2019-20, it added.

The volume of shipment dipped to 49,000 tonnes in FY24, down 8 percent year-on-year.

Export receipts fell in line with a decline in the volume of shipments, according to the association.

In FY24, exporters fetched $75 million in earnings, down 11 percent year-on-year.

The association expressed concerns that they would lose the market to the exporters from India, Nepal, Pakistan, and Sri Lanka because of the increase in airfreight charges.

"We want a reasonable fare for the agricultural products following adjustments with that in neighbouring countries," he said.

The trade body also complained that the rate offered by Biman for garments is low compared that of the other airlines.

Bangladesh usually exports a wide variety of vegetables and fruits to the Middle East, with Saudia Arabia, United Arab Emirates, Qatar, Oman, Bahrain, and Kuwait being the main destinations.

The second largest export destinations are European countries, including the United Kingdom, Italy, Germany and France. A small quantity of fresh produce is shipped to Asian countries like Malaysia and Singapore.

Among the North American countries, only Canada is the main destination.

Biman Spokesperson Boshra Islam said it was not only Biman, rather other airlines operating from Bangladesh had also increased air cargo freight charges.

"Our fares are still less than the fares of other airlines," she said.

Biman carries 15 percent to 17 percent of the total export cargo going through as airfreight. "We do not have any cargo carrier. We carry export items in our passenger flights," she added.