Bangladesh faces $2.4b annual post-harvest losses: LixCap

Each year, up to 20-44% of fruits and vegetables are wasted in Bangladesh, resulting in estimated annual losses of $2.4 billion, according to US-based LixCap, which provides business and investment advice for frontier and emerging markets.

During a keynote presentation at the "Cold Chain Investment Conference 2024" in the capital on Wednesday, William C Fellows, managing principal at LixCap, emphasised that investing in cold chain logistics can significantly reduce post-harvest losses.

The conference was jointly organised by the Bangladesh Investment Development Authority (Bida) and the US Department of Agriculture (USDA)-funded Bangladesh Trade Facilitation (BTF) project at Bida headquarters in Dhaka.

At the programme, Michael J Parr, project director at BTF, emphasised the importance of state-of-the-art temperature-controlled logistics facilities as a crucial addition to Bangladesh's food and agriculture sectors.

Prime Minister's Private Industry and Investment Adviser Salman F Rahman said, "I strongly believe that developing the cold chain sector is imperative for achieving a Smart Economy and a Smart Bangladesh.

He mentioned that by 2031, temperature-controlled logistic services in Bangladesh, including storage, transportation, and value-added services like grading, labelling, and packaging, are expected to have a combined market value of $440 million.

Consequently, the demand for cold chain services in Bangladesh is projected to increase at an estimated 11% compounded growth rate, he said, pointing out that consumers in and outside Bangladesh are shifting their focus towards supporting supply chains that ensure sustainability and the delivery of products in optimal conditions.

He continued, "So, businesses, along with their financiers, have to consider how to plan ahead and integrate new technology into their supply chain to retain and capture both domestic and export markets."

Mostafa Azad Chowdhury Babu, president of the Bangladesh Cold Storage Association, said currently there are more than 450 cold storages, which are mainly potato based.

"Despite the good production of onions in various parts of the country, 25% is wasted due to a lack of storage. As a result, once the Indian import stops, onion goes above Tk100 per kg. Moreover, consumers are eating fruits containing formalin because the preservation system is not up-to-date," he lamented.

Now, many entrepreneurs and owners are looking for diversification in cold storage. But they still don't understand how to improve the cold chain system. For this, a policy is needed from the government to attract investors to invest, so that investors can set up cold storage.

At the same time, he demanded the authorities arrange a separate loan to build a better cold chain, saying, currently the interest rate is very high. In such a case, traders with 13% interest will not be able to invest here.

Khandaker Nazmul Haque, first secretary at the National Board of Revenue, announced plans to reduce heavy import duties on refrigerated vans to facilitate the cold-chain sector's growth.

He emphasised the need to enhance opportunities for handling perishable goods at inland container depots and assured the provision of necessary facilities to support investment in the cold-chain sector.

Economist M Masrur Reaz, CEO of Policy Exchange Bangladesh, highlighted Bangladesh's heavy reliance on the garment industry for exports, with 84% of export earnings attributed to this sector.

He lamented the lack of implementation regarding export diversification, citing maintenance and processing weaknesses hindering the potential of agricultural product exports.

Reaz noted that proper storage could reduce the need for importing products like potatoes and onions, thereby reducing prices and allowing for increased exports of other food products.

BIDA Executive Chairman Lokman Hossain Miah highlighted Bangladesh's significant agricultural production rankings, such as being the 3rd largest producer of vegetables and garlic, 4th in fish production, and 7th in onion, potato, ginger, eggplant, and bean seed production worldwide. 

However, due to insufficient storage facilities, Bangladesh often resorts to importing instead of exporting these products. Therefore, he emphasised that investing in cold chain infrastructure would be highly profitable.

Miah also affirmed Bida's commitment to collaborating with investors to facilitate investment and assured that in the future, it would provide various investment services, including overcoming obstacles to investment.

Other speakers at the event included Secretary of the Ministry of Fisheries and Livestock Md Selim Uddin, and President of the Federation of Bangladesh Chambers of Commerce and Industry Mahbubul Alam.