Rice bran oil’s Tk300cr boost to Bogura exports

Achieving a staggering growth, Bogura, a northern district of Bangladesh, witnessed its annual export earnings boost to over Tk500 crore last year from only a little over Tk100 crore five years ago, mainly riding on rice bran oil.

Alongside agro-products that mostly contributed to raking in forex earnings, light engineering and farm machinery in the region's export basket also played a part in propelling the growth at a faster pace.

The number of export items manufactured in the district has also risen to at least 16 from 10 during the time.

Exporters say more products are joining the list.

The range of export items from Bogura includes irrigation pumps, rice bran oil, jute yarn and jute bags, sacks and threshing machines, potatoes, pets and various types of plant saplings.

Among other products, synthetic hair goods are exported to the United States, potatoes to Sri Lanka, jute bags to Singapore, tree saplings to Turkey, pants, vests and soybeans to Nepal and Bhutan.

The growth driver

Rice bran oil, which has been at the top of the list over the last five years, accounted for over Tk300 crore worth of the exports last year alone.

Demand for rice bran oil is the most in India. In 2018, rice bran oil export amounted to Tk250 crore.

But exporters could not enter the potential markets of Australia and Japan because there is not enough raw materials for the producers.

Four companies that produce rice bran oil in Bogura – Majumder Products Limited and Western Agro Products Limited in Sherpur, Tamim Agro Industries in Shahjahanpur, and Al-Noor Agro Limited in Kahalu upazila – mainly export their products.

Tamim Agro Industries exported Tk143.47 crore worth of rice bran oil last year.

Nayeem Hasan Rupon, director (finance) at the company, said they have been exporting the edible oil for more than 10 years.

"Japan, Australia, and China were the earlier export destinations but in recent years there is a growing demand for this oil in India," he said.

There is now a shortage of rice husk, the main raw material for producing such oil, he added.

"The demand is increasing as the oil we produce is of good quality. There is a demand for this oil in other countries as well," he said.

India's rice bran oil imports from Bangladesh were expected to double in FY21 from 75,000 tonnes in the previous fiscal year, an Indian newspaper reported, quoting business sources.

India produces about 10 lakh tonnes of rice bran oil every year.

How Majumder Products entered the race

In 2008, Chitta Majumder, managing director of Majumder Products Ltd, set up a rice mill in Jashore's Noapara and started importing rice from India around 2010.

He got the idea of setting up a rice bran oil mill when he came across such mills in different Indian states. The millers in the neighbouring country, despite being in this business for the past 40 years, could not gain a strong foothold in the rice bran oil market.

To cash in on their poor run, Majumder stepped up and established a rice bran mill in Bogura in 2012.

"We have been exporting rice bran oil in crude form, mainly to India, since 2015," he told The Business Standard.

Within a few years, Majumder's mills became the market leader. "Since 2018, we have been exporting the most amount of crude rice bran oil from Bogura," he noted.

His mill produces 150-160 tonnes of oil per day and the whole amount is exported to India.

Soybean meal export grows too

Last year, jute sacks and yarns, the second most exported item, amounted to Tk150 crore in exports to the markets of India and Singapore, a rise of Tk30 crore from 2020.

Exports of soybean products (Soybean meal, De oiled soybean meal), which has risen to the third position in the export list after having pushed the irrigation pump to fourth, has made a profit of Tk35 crore in 2021.

There is no significant information available about exports of soybean products from Bogura in the previous years.

Irrigation pumps made in Bogura are in great demand all over the country. Irrigation pumps are also exported abroad after meeting local demand. Some Tk1 crore worth of irrigation pumps were exported from Bogura last year. The receipts amounted to almost the same in the previous years.

According to traders, once the global market overcomes disruptions caused by the pandemic, it is possible to generate record export output from various agricultural products from Bogura, as it is one of the major agricultural districts in the north.

Traders have been exporting potatoes grown in Bogura for more than a decade now, while cabbage has been going to Malaysia, Singapore and Taiwan for seven years.

Among other items, sweet pumpkin, gourd and hand-woven caps are also exported from Bogura.

Of all the upazilas in the district, Shibganj records the highest vegetable yields, and most vegetable exports are from this upazila.

Shibganj Upazila Agriculture Officer Al Mujahid Sarkar said, "At least 14,000 tonnes of potatoes were exported from Bogura last year and we are expecting the number to further go up this year. And, last year, 2,400 tonnes of cabbage were exported from Bogura, of which 623 tonnes were shipped to Malaysia."

According to the Department of Agriculture Extension, in addition to agricultural products from Shibganj, various handicraft products made by rural women of Sherpur and Kahalu upazilas are exported abroad. These products are exported to various European destinations, including Germany, Sweden, France, the Netherlands, England, Italy, Norway and also to Australia.

However, these products are not listed with the Bogura Chamber of Commerce and Industry and as such the export earnings are expected to be higher.

Bogura has the reputation for meeting the country's demand for irrigation pumps and export abroad.

Bogura exporters say thousands of small and big foundries have grown at different parts of the city to make irrigation pumps. Centring these factories, a large market for agricultural machinery has developed at the Gohail and Station Road area, where more than two lakh people are working. Bogura's journey of exporting products started in 2000 through the export of irrigation pumps.

At present, some businesses are exporting products with Certificate of Origin from Bogura Chamber of Commerce and Industry. Many are also exporting products with Certificate of Origin from Dhaka, Chattogram, and Narayanganj Chambers. Now, Bogura-made products are going to Europe, Middle East, and Australia besides India and Malaysia.

The largest market for Bogura-made jute yarns, twine and bags is in India. These jute products are exported by Hasan Jute Mills, Bogura Jute Mills Limited and Ma Traders.

Traders say there is a huge demand for Bogura-made products outside the country, especially in India. But the export has been disrupted significantly due to the ongoing coronavirus pandemic.

Besides, due to high prices of raw jute, it has become difficult to produce such items, they add.

According to the agriculture department, about 1.5 lakh irrigation pumps are required every year across the country. India is a big market for exporting the irrigation pumps.  The foundry factories of Bogura also make agricultural equipment.

Last year, Rony Engineering Workshop and Milton Engineering exported centrifugal pumps and spare parts worth Tk15.58 lakh to India.

Abdul Matin Sarkar, managing director of the company, said the best pump in the whole country is made in Bogura. But traders have suffered setbacks because of the pandemic.

"If we can avail low-interest loans, we can turn their businesses around. Besides, more new entrepreneurs will be able to export products to different countries," he told TBS.

Last year, Raihan Traders alone exported Tk2.3 crore worth of potatoes to Sri Lanka. Md Shahidul Islam, owner of Raihan Traders, said potatoes produced in Rangpur and Thakurgaon are more in demand than those in Bogura.

"Brunei and Bahrain are potential big markets for exporting potatoes. Keeping it in mind, the agriculture department should provide assistance to the potato sector," he added.

Selling different types of trees has added a new dimension to the export market. Satvai.com, an online nursery, which is a member of Bogura chamber of commerce, exported Tk6.53 lakh worth of mango and litchi plants to Turkey for the first time.

"These plants are being shipped from the Chattogram port to foreign buyers. There is a huge global demand for plants and we plan to export various species of trees, including fruits and flowers, in a large scale in future," said Shariful Islam Kollol, the owner of satvai.com.

Terming Bogura the lifeblood of the North, Mahfuzul Islam Raj, vice-president of the Bogura Chamber of Commerce and Industry, said, "Bogura-made products are being exported abroad after meeting the local demand and it is generating revenue in crores. If Bogura had an airport, domestic and foreign investments would increase in the region."

"The wheel of the economy will be stronger," he added.