Shrimp is a important product in the country's export basket. Despite having its immense potential the item from Bangladesh has so far failed to enhance its share in the global market to the desired level.
Sector insiders and experts have attributed some reasons including lack of initiative for raising production, exploring new markets and introducing the new hi-productive species - vannamei to such less than expected level of export of shrimp.
Exporters say lack of government's necessary policy support for the promotion of the shrimp industry is one of the main roadblocks to the sustainable export growth of the item.Experts however blamed exporters for their poor initiative towards the expansion of export market.
The frozen fish sector became the country's second largest foreign currency earner with a total earning of $ 454.53 million in 2008-09 fiscal year surpassing the jute sector.
The sector witnessed negative growth of 14.89 per cent in 08-09 fiscsal, 2.06 per cent in 2009-10, , 4.26 per cent in 2011-12 and 22.47 per cent in the first five months of current fiscal (2012-13) except 2010-11 fiscal when it witnessed a reversal, export recording a 40 per cent positive growth.
According to the Bangladesh Frozen Food Exporters Association (BFFEA), Bangladesh now exports individual quick frozen (IQF) shrimps, which are without head, ceel and devain-without the shell --- and it is ready to cook. The country also exports semi-cooked varieties which are ready to eat.
Around 70-80 per cent of the factories based in Khulna and Chittagong have now set up modern machinery to cook and process shrimps.
But the sector fails to reap the financial benefit out of the growing global demand of vannamei, the new variety of shrimp, because of the ban on the production of the variety in the country. The main competitors like India, Thailand and Vietnam have already started getting benefit of vannamei while its cultivation is restricted in Bangladesh.
The new variety of shrimp has a tremendous demand in Russia, Australia, Canada, Spain and New Zealand as well as in Asia as the small sized shrimp is available at an affordable price.
Considering the present scenario Prime Minister's Office recommended fisheries ministry to introduce vannamei cultivation as pilot basis. Despite the PMO's recommendation the ministry concerned is yet to take necessary step of actions while competitor countries are taking the full advantage of vannamei.
India has raised its production by 19 per cent in the current fiscal year mainly because of vannamei farming. According to BFFEA India produced 250,000 tonnes of vannamei shrimp last year and this year it expects to produce over 400,000 tonnes.
The countries which cultivate white shrimp can produce more than 1,000 kilogramme (kg) of it on per hectare of land, whereas production of the traditional shrimp (Bagdha) in Bangladesh is only around 200 kg per hectare. The black tiger's rate is $8.0-11 per pound while that of vannamei is only $3.0-4.5 per pound.
If the government allows to cultivate the new variety, the Bangladesh can raise its production three times more in the first year without preparing the present land. As many as 150 fish processing plants have become sick and failed to produce and export fish due to lack of raw materials and the factories can use only 20-25 per cent of their capacity.
Another reason why the sector is not growing, is its sole dependence on the traditional EU and US markets which are undergoing recession resulting in a sluggish export of frozen shrimp from Bangladesh. It is also a vulnerable situation for the country.
Garment sector that contributes about 80 per cent of the total export earning has taken move to explore new markets is starting to give its dividend though government's incentive has encouraged them in this regard.
But it seems that the government is reluctant to extend similar support other sectors especially the frozen fish one which is not getting any incentive even the government is thinking to cut off its cash support gradually from the sector.
Frozen fish exports to the USA have declined significantly in last three or four years. Exporters said only 10 per cent of the total frozen fish is now heading for the second largest United States (US) market which was about 30 per cent couple of years back.
The sector made shipment of frozen fish worth $76 million in 2009-10 fiscal, $110 million in 2008-09, $140 million in 2007-08, $170 million in 2006-07 fiscal year to the US market. Earning from the US market declined mainly because price of Bangladesh shrimp cannot compete with that of the small sized vannamei, demand for which is incredibly growing there following the recession. Exporters feared that this year the earning might decline by 40 per cent.
Vice Chairman of EPB Shubhashish Bose also admitted that the frozen fish exporters informed the Bureau that they were failing to reap financial benefit from the global markets as they could not include vannamei in their export basket. It also recommended the concerned ministry to start vannamei cultivation prior to pilot basis. But the fisheries ministry is very much reluctant to the issue.
Shrimp exporters are failing to harness the full potential of the Russian market due to lack of follow-up action by the government agencies and the industry association, exporters said at present two or three companies can secure permission to export frozen fish in Russia, although more 30-plus shrimp and fish processing establishments are capable of complying with the food safety requirement of the Russian Federation.
Bureaucratic tangles and dilly-dally of the authorities concerned have threatened the Russian market. A memorandum of understanding (MoU) was signed between Department of Fisheries (DoF) and the Federal Service for Veterinary and Phytosanitary Surveillance of the Russian Federation in November 2010 to strengthen the inter-agency cooperation.
Russia has emerged as a good destination for Bangladeshi shrimp, because Russian importers pay higher prices and make advance payment. Moreover Russia's inclusion in the WTO also ushers new opportunity for Bangladesh. But there has been no follow-up to the MoU even in 2012. DoF has sent a list of 31 companies, which are recognised in the European Union, but it has not yet received any response from the Russian authority.
A food and veterinary team from the Federation was scheduled to visit the country in May 2010, it rescheduled the visit in September to inspect the potential of local shrimp and fish processing establishments. But the team is yet to come to inspect and no government or shrimp association took the initiative to ensure the entry of 31 companies, exporter said.
Fisheries ministry official said a delegation will visit Russia early next year to explore the market potentiality. DoF official just say they are taking steps but no such visible initiative is taken till now.
If the market opens for all, a minimum amount of Tk 2.0-3.0 billion could easily be added to the total frozen fish earnings. The government should take initiative to diversify markets and reduce dependence on a single market-EU, exporters said, warning that export to the EU market might go down further in the current fiscal.
FE Staff Reporter