Helping shrimp exporters

Published: January 06, 2019 22:02:02 | Updated: January 08, 2019 22:19:24

Downslide in shrimp export continues as exporters of the item are in a double whammy. Shrimp exporters, on the one hand, are fighting a losing battle against low-priced 'vannamei', one species of shrimp, exports and, on the other, struggling hard to cope with the soaring prices of black tiger variety of shrimp and fresh water prawns in the local market. The prospect of shrimp export that once looked very promising now appears bleak. The earning from shrimp export peaked to US$ 590 million in the fiscal 2012 and after fluctuations in next three years, it has been experiencing continuous slide.

Unless some measures are taken to make Bangladesh shrimps competitive in the international market, there could be further squeeze of its market size. Some problems with quality had left some impact on exports of shrimps, but now the price has emerged as a major problem. This is a matter of serious concern, given the country's limited export basket. The government is left with two options--- it should either allow production of vannamei or provide greater incentive to the frozen food sector to make it competitive in the global market.

Nearly 850,000 people are involved with shrimp cultivation covering an area of 2.75 lakh acres. The number of shrimp farmers and others employed in the sector is sizeable. Moreover, the land used for shrimp culture is usually salinity-affected that used to remain fallow. So, beside export earning, from the employment point of view, shrimp culture carries certain other economic value. Thus, the industry remains a strong candidate for government support. The policymakers in recent times are found to be very generous towards one particular export sector---the readymade garments (RMG). The RMG sector, in fact, is receiving a double dip; it is getting corporate tax waiver and also cut in export tax deducted at source. None would have reasons to raise objections to giving support, fiscal or otherwise, to a sector that fetches more than 80 per cent of the country's export earnings. But the government should not, however, behave miserly when it comes to helping other sectors that are regularly fetching foreign exchange. The policymakers need to be desperate to find some more dependable export items since the country remains more vulnerable to external shocks in the event of a thin export base.

Undeniably, the country does not have that much of primary raw materials for the purpose of export. Barring RMG, its manufacturing base is also too shallow to make a mark in the export market. RMG as a manufacturing industry has thrived because of the fact that the skill level of workers involved with it does not need to be very high. But gradual automation of the industry that is now in place is likely to emerge a serious threat to the future of Bangladesh's RMG sector. The special economic zones could in future help raise the volume of manufacturing exports, if sufficient number of foreign investors is attracted to those. But the government should be duly attentive towards further strengthening its own traditional export base side by side helping the manufacturing exports grow smoothly. None should be oblivious of the fact that extent of value addition element in the case of local traditional items, in most cases, is 100 per cent. Frozen foods including shrimps do fall in that category.

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