Annual import of consumer-oriented products rises to $2b

Bangladesh's import of various consumer-oriented products such as dairy products, fruits, tree nuts, spices, and soup is growing, driven by growing demand from middle-class consumers, urbanisation and lifestyle changes.

The South Asian nation spent US$2 billion to import consumer-oriented products in 2022, compared to $1.5 billion in 2018, according to a report by the US Department of Agriculture (USDA) released earlier this month.

Dairy products, fresh fruits, spices, fresh vegetables, soup and other food preparations as well as tree nuts were the top imported items in 2022 among consumer-oriented products, accounting for roughly 90 percent of total imports of such products.

"Urban consumers are increasingly spending more on imported food items and are changing their eating habits to consume more international foods," the US agency said in its report.

The organisation said there is a good prospect that consumer-oriented products would grow steadily in Bangladesh, the world's 41st largest economy. With a population of 17 crore, the country is poised to graduate from Least Developed Country status in 2026.

The report said rising per-capita income, increased urbanisation, increasing female labour force participation, and the resulting lifestyle changes had been augmenting the demand for processed dairy products, bakery products, ready-made meals, confectionery items, breakfast cereals, baby food, beverages and sauces.

"Ingredients for the bakery sector and confectionery food industry, a growing number of quick service restaurants, and e-commerce food delivery to meet the demand for Asian and Western cuisines are driving import demand," said the agency.

The country imports most of its consumer-oriented products from India, New Zealand, China, South Africa, Singapore, the US, and nations in the European Union.

The USDA report listed tree nuts, food preparations, dairy products, processed vegetables, condiments, fresh fruits, spices, and fresh vegetables as products that saw major growth.

Bangladesh has a growing demand from middle-class consumers while modern retail stores such as Shwapno, Agora, Meena Bazar and Unimart are expanding. Some 50 companies with more than 250 outlets are currently operating here.

"An increasing percentage of upper middle to upper class consumers are shopping at modern retail outlets due to greater convenience. Consumers in higher income brackets prefer international brands, including products from a specific country of origin, which they believe indicates safety and quality."

The US agency, citing tree nuts, said higher purchasing power and increased health-consciousness had been fuelling demand.

Bangladesh imported tree nuts worth $53 million in 2022, almost double from four years prior, according to the report. It added that almonds, walnuts, and a variety of prepared, mixed, and preserved nut items made up most of the import of tree nuts.

India and Indonesia dominate the market for tree nuts, accounting for 22 percent and 23 percent of Bangladesh's imports of the fruit. The US exports of nuts to Bangladesh surged 179 percent in four years to $3.5 million in 2022.

"With changing dietary preferences, the popularity of tree nuts is expected to increase," the report said, adding that total tax incidence (TTI) for almonds and walnuts in Bangladesh ranges from 58.6 percent to 89.32 percent.

It said the demand for imported processed fruit, specifically dates, has steadily risen during the past five years.

The USDA cited soup and other food preparations and said Bangladesh imports a variety of food preparations to meet the diverse culinary preferences of consumers, adding that imports of such items soared from 2018 to 2022.

The food preparations category encompasses beverage concentrates, soy-based food preparations, stabilisers for milk and creamer, and various food supplements, it added.

On dairy products, the report said Bangladesh's dairy market had grown to $3 billion.

The expansion is fueled by the growing middle class, expanding urbanisation, and increasing consumption, creating market opportunities for milk and cream powder, whey, lactose syrup, malt extracts, and food preparations, said the USDA, adding total dairy product imports increased by 44 percent over the past five years.

Besides, the growth of restaurants focusing on global cuisine has resulted in an increased need for condiments and sauces.

Imported condiments and seasonings including soy sauce, tomato ketchup, mustard flour and meal, prepared mustard, and vinegar, the report said.

The US agency said market demand for bakery goods, cereals, coffee, roasted and extracted processed vegetables, mainly onion powder, and fruit and vegetable juices was also growing.

"Increasing consumer demand for convenience, shifting lifestyles, a preference for coffee over tea, and heightened health consciousness is driving demand," it said.

Shaheen Khan, chief business development officer at Gemcon Group, which runs Meena Bazar, said the income of a section of consumers is growing.

"A section of consumers are showing interest. Aspiration among the middle class is rising. Nowadays, we see demand for barbeque-related items rise during winter," said Khan, former chief executive of Meena Bazar.

But the demand for the imported items is yet to grow among mass people. It is still urban centric, he added.