Bangladesh's $8B Processed Food Industry Faces Wastage, Safety Challenges
Food wastage and safety challenges are significant hurdles for Bangladesh's processed food industry, despite its substantial market size and economic contribution. The sector, worth $8 billion, contributes 1.7% to the GDP and employs 250,000 people. However, it faces issues like high food wastage, costly imports, and stringent international food safety regulations.
Bangladesh's processed food industry is dominated by local consumption, with a market size of $8 billion and an 8% annual growth rate. However, its export market is much smaller, at $341.73 million in 2023-24. The industry contributes around 1.7% to the GDP and provides employment to approximately 250,000 people.
The share of processed food in Bangladesh's total exports is around 3.5%, primarily consisting of frozen food products, tea, spices, and fruits. Despite this, the industry faces numerous challenges. Food wastage, particularly of rice, fruits, and vegetables, amounts to a significant $2.4 billion annually. High import duties on packaging materials also hinder international competitiveness.
Currency devaluation has led to increased costs of food additives and imported raw materials, affecting export-oriented processed food entrepreneurs. Additionally, overuse of pesticides, lead-contaminated soils, and microplastics in water pose serious threats to food safety. Entering the international market requires adhering to strict food safety regulations, which can be challenging for Bangladesh's industry.
To remain competitive, large agro-based food processing companies typically implement strategies such as modernizing production technologies, enhancing quality control, and expanding global market access. However, the absence of good agricultural and manufacturing practices hinders the growth of the industry.
Bangladesh's processed food industry, despite its significant market size and economic contribution, faces substantial challenges. Addressing food wastage, improving food safety, and reducing import duties on packaging materials are crucial for the industry's growth and international competitiveness. Implementing good agricultural and manufacturing practices and adopting modern technologies can help the industry overcome these hurdles and tap into the global market.
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