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The country's export earnings from processed agro-products crossed US$635 million in fiscal year (FY) 2017-18, thanks to the growing global demand.
The amount was around 27 per cent higher than that of $500 million in FY '17, according to the Bangladesh Agro-Processors Association (BAPA).
It has registered a 502 per cent rise in the last six years, the available data showed.
Experts said the sector is poised to grow at a much higher rate with local firms' penetration of new export destinations.
Quality products, cheap labour, competitiveness, government's policy support and cash incentives have helped promote this emerging sector, they added.
Sector insiders said a modern testing lab, better utility services and building farmers' awareness are central to the $1.0 billion export target by 2021.
Major exportables are juice, drinks, puffed rice, snacks, spices, chanachur, biscuit, pickle, frozen vegetables, vermicelli, potato flakes/starch, jam-jelly, candy, mustard oil and flattened rice.
Pran Group, IBCO Food Industries, Eurasia Food Processing (BD), Square Consumer Products, Raj-Kamal Corporation, Bonoful & Co, Azmi Foods and Aline Food Products are the leading exporters.
Bengal Meat Processing Industries, Bikrampur Consumer Products and Prome Agro Food Products are also among the 150 companies exporting foods abroad.
Pran contributes more than 60-70 per cent of the total processed food exports.
It earned $330 million in last fiscal, Kamruzzaman Kamal director (marketing) of PRAN-RFL Group, said.
Mostafa Kamal, proprietor of Raj-Kamal Food, said processed food is a potential sector as the exporters are getting orders from abroad regularly.
"Recently, we've made a contract with a London-based company to export food items, he told the FE.
However, Mr Kamal urged the government to provide uninterrupted utility services for smooth business.
It should also provide technical and technological support to farmers so exporters can buy raw materials at cheap rates, he cited.
The volume of processed food export is increasing drastically, Mr Kamal said, adding that it crossed 40 per cent in the previous fiscal.
Raj-Kamal Food is seeking new destinations to increase its export earnings, he added.
In early years, especially before 2000, agro-food export was limited and earnings too. It was nearly $21.56 million in FY 2001-2002.
According to the BAPA, the sector earned $240.40 million in FY '16 and $224.20 million in FY '15.
The figures were $153.50 million and $101.49 million in FY '14 and FY '13 respectively.
When asked, BAPA general secretary Md Iqtadul Hoque said processed food exports can rise exponentially, provided the adequate policy support.
"Local exporters are now shipping products to China, which is a major achievement of us," he told the FE.
It was declared as a thrust sector in the Industrial Policy 2016, Mr Hoque said, adding that the government provides concessions and subsidies to agro-processors.
Uninterrupted supply of electricity, gas, water and fertilisers, specialised storage, modern labs and packaging system are the demand of time, he added.
Nazneen Ahmed, senior research fellow at Bangladesh Institute of Development Studies, said exporters should diversify products and ensure quality.
She laid emphasis on expanding markets in Europe.
Currently, local manufacturers export to 144 destinations, including the United States, the United Kingdom and India, Ms Ahmed said.
At a function on October 25, commerce minister Tofail Ahmed said the export earnings from processed food items are expected to hit $1 billion by 2021.