Bangladesh contributed to 2% of the World’s total cereal production and approximately 1% of the World’s total primary crops produced in 2020, despite covering just 0.11% of the world’s surface area1. The agro-processing industry in Bangladesh is undergoing significant transformations due to urbanization and industrialization trends. Currently, 45% of the population derives their income from agriculture, a substantial decrease from 65% in 2000. The rapid urban population growth at a rate of 3% annually indicates that, by 2040, an estimated 100 million people will reside in cities. However, this shift is accompanied by challenges stemming from climate change, including salinization and unpredictable weather patterns, which adversely affect farming and food production. This presents a complex scenario; available agricultural land is diminishing while the demand for increased and more nutritious food is on the rise. To deal with this complicated scenario, the public and private side players of the sector are focusing their efforts towards increasing mechanization, introducing better farming practices, and developing infrastructure for increasing productivity and creating a more efficient value chain.

Rice remains the primary staple crop in Bangladesh, dominating both in terms of production volume (38 million MT) and land use (77%). The country cultivates approximately 150 different vegetable crops, with onions, garlic, tomatoes, brinjals, cabbages, cauliflowers, gourds, and chillies among the most prominent. Annually, over 6 million tons of vegetables are produced, including 2.2 million tons of summer vegetables and 3.8 million tons of winter vegetables. 

Fruit production in the FY 2021-2022 amounted to 5.3 million tons. Additionally, Bangladesh cultivates around 4 million tons of spices, including chillies, onions, garlic, and ginger. In the FY 2021-2022, the country also produced 8.4 million tons of jute and exported approximately 800,000 tons of raw jute and its products.

In the oilseeds sector of agro-production, Bangladesh heavily relies on imports, with 94% of the demand met through imports, primarily from the Americas during the FY 2021-22.

The total value of imported crops in 2021-22 amounted to USD 9.1 billion, with key imports including wheat, soybeans, edible oil, onions, garlic, and tomatoes. Bangladesh exports items like pickles, chutneys, and fruit juices, with major markets including countries in the Middle East, the United Kingdom, and Italy, primarily serving the Bangladeshi diaspora. These dynamics underscore the evolving landscape of the agro-processing industry in Bangladesh, characterized by shifting consumption patterns, import dependencies, and export potential.

Key Factors Driving the Agro & Agro-Processing Industry

 

  1. Availability of Agricultural Resources: Bangladesh contributed to 2% of the World’s total cereal production and approximately 1% of the World’s total primary crops produced in 2020, despite covering just 0.11% of the world’s surface area. Bangladesh has fertile land and a favorable climate for various crops, including rice, fruits, vegetables, and spices, providing a consistent supply of raw materials for processing.
  2. Rising Agricultural Production: Increasing agricultural productivity driven by mechanization and diversification of crops contributes to a growing availability of raw materials for processing.
  3. Growing Demand: A large population with increasing consumption ensures a steady domestic market for processed agro-products, including staples like rice and wheat and value-added items.
  4. Rising Income Levels: Higher incomes enable consumers to afford more processed and value-added agricultural products. According to the World Bank, Bangladesh’s GNI (current USD) grew by 232% over the past decade, with an average growth rate of 6.15% over the same period.
  5. Urbanization: The trend of urbanization is driving demand for processed and convenience foods among urban consumers with busy lifestyles.
  6. Changing Consumer Preferences: Evolving consumer preferences, influenced by exposure to global food trends, are creating demand for a wider range of processed products.
  7. Export-Oriented Focus: The government’s focus on export-oriented agro-processing ventures enhances the sector’s potential for international trade.