Export 2.0: The untapped potential of Bangladesh’s agro-processing sector

Though fertile land and a year-long harvest season allows Bangladesh to grow sufficient agro products to tap into the export market, weak infrastructure, poor compliance with global standards and lack of branding keep the sector from competing internationally. 

This is a missed opportunity, as with the country mulling export diversification, the agro-processing industry could serve as a worthy contender to ready-made garments (RMG). 

Worth over $4 trillion, unlocking even a fraction of the global agro-processing market would dramatically diversify our export basket and create thousands of rural jobs. 

Yet the absence of strong policy support, investment in cold chains and quality upgrades remain as barriers.

Stuck with low-value products

Agro-processing already contributes about $1.2 billion to Bangladesh's export earnings. Yet over 75% of agricultural output still leaves farms unprocessed; exporters often ship frozen vegetables, raw spices, dry foods, and juices in bulk without building globally recognisable brands.

One of the main reasons behind this is capacity. According to industry insiders, only 12% of processors meet international export standards like ISO or ICCHAP. A large number of small and medium enterprises (SMEs) lack access to modern machinery, proper packaging, cold chain facilities, or internationally accredited testing and certification systems.

In comparison, countries like Vietnam have built strong agro-industrial ecosystems, allowing them to export branded, high-value food products worth $62 billion in 2024. Bangladesh's export is less than 2% of that.

Agricultural economist Jahangir Alam says, "We are currently stuck at exporting raw produce or semi-processed products. If we can increase processing, the value will naturally rise."

He stresses that industrial capacity is a precondition for upgrading exports. 

"The development of the processing industry should not rely solely on private enterprise. The private sector is often reluctant to move forward without adequate support. Industries need to be developed to process these goods," Alam adds.

Meeting global sanitary and phytosanitary standards

The agro-processing sector's export ambition collides with one of its biggest hurdles: meeting international sanitary and phytosanitary (SPS) standards.

Importing destinations such as the EU, Japan and the US have strict protocols around pesticide residue, microbial contamination, traceability, and hygiene. Bangladesh lacks internationally recognised testing laboratories, forcing exporters to rely on facilities in India or Thailand, which increases costs and delays shipments.

The Bangladesh Agro-Processors' Association has long argued that BSTI certificates are not recognised abroad. A national testing lab is under development but remains far from meeting exporters' needs.

Farm-level practices are another weak link. Inappropriate use of chemicals, weak traceability and poor post-harvest handling frequently result in rejected consignments. The Bangladesh Food Safety Authority has introduced guidelines, but compliance remains patchy among SMEs and smallholders.

Jahangir Alam points out that the problem is not just technical but systemic, "It is essential that the processed product is hygienic, germ-free and produced under excellent conditions. Producing this high-quality, finely processed product must be our goal."

Diaspora markets vs mainstream global markets

For the past three decades, Bangladesh's agro-processing exports have depended on its overseas diaspora. More than 75% of processed food exports are concentrated in just 13 countries — mainly the UAE, Saudi Arabia, the UK, the US, Malaysia, and Singapore.

These markets are sustained by Bangladeshi, Indian and Pakistani consumers who buy puffed rice, chanachur, spices, pickles, parathas, and juices from small ethnic stores.

But exporters have struggled to reach mainstream supermarket shelves where branding, quality assurance and packaging standards are non-negotiable. 

"Currently, the products and processed foods we export primarily go to the diaspora markets abroad," Alam explains. "However, if we improve our quality, everyone will buy them, including foreign nationals in those countries. Therefore, quality is paramount."

Kamruzzaman Kamal, director (marketing) of PRAN-RFL Group, says "When we were primarily catering to the ethnic market, we supplied basic products. However, as we move towards the mainstream global market and focus on major international supermarket chains, we are required to develop a premium-quality product range, and we are indeed doing so. 

"The reason we couldn't achieve this sooner is essentially because the market needed time to mature. If we introduce very high-end products right from the start, it can be difficult to achieve market penetration. The majority of our exports are still bought by the diaspora community — our non-resident citizens — who are the primary consumers," he adds. 

Cold chain, logistics and government support

Bangladesh's perishable agro-export suffers heavily from inadequate cold chain infrastructure and fragmented logistics. Perishable vegetables, dairy and meat products face spoilage before reaching ports. There is little coordination between farmers, processors and logistics providers.

Government incentives exist on paper: reduced corporate tax for fruit and vegetable processing until 2030, duty exemptions on capital machinery, and a 10% export subsidy for halal meat. But in practice, the absence of coordinated infrastructure investment is a bottleneck.

According to recent investment promotion data, agro-export earnings rose by 9.3% in the first half of FY25, reaching $595.5 million. Yet experts argue that increasing exports will require integrated investment in cold chains, modern packaging, airport scanner facilities, and logistics coordination.

Alam emphasises, "While the government has policies in place, implementation is crucial. The government must provide robust support and assistance to the private sector. Currently, this support is often insufficient."

Kamal thinks the private sector has to step up to increase agro-processing export. 

"There is one key limitation in Bangladesh that we constantly discuss: the sourcing of raw materials. The prerequisite for safe food is a safe ingredient. This is why we always highlight the gap in implementing Good Agricultural Practices (GAP) in Bangladesh. If GAP can be properly ensured, we will be able to perform testing domestically. Currently, we are forced to get our products tested, at the very least, from Singapore or India, which is both time-consuming and expensive," he explains. 

At a recent roundtable on agro-processing export, Md Al Amin Rumi, AGM-Business Development, CEMS Bangladesh, said, "The RMG sector's export-marketing strategies contrast sharply with those of agro-processing, a disparity which requires urgent attention. Authorities are now revamping engagement tools to ensure continuous stakeholder collaboration beyond expos, aiming for deeper networking. Success hinges on unified support from all involved parties. 

"This shift seeks to bridge long-standing gaps and strengthen export readiness across industries, moving past one-off events towards sustained growth. Collective effort remains vital for meaningful progress," he added. 

A billion-dollar sector that could triple in size

The numbers paint a clear picture. Agro-processed exports currently stand at around $341.7 million annually, part of the broader $989 million in agricultural export earnings. That figure has grown slowly, from $964 million in FY24, despite huge potential.

Global agro-processing is projected to reach $4.2 trillion by 2027. If Bangladesh could raise its market share from 0.03% to even 0.24%, as projected in sector studies, exports could cross the $3 billion mark.

The transformation of the RMG industry offers useful lessons. In the early 1980s, Bangladesh exported garments mainly to diaspora retailers. With policy support, training, infrastructure, and trade access, the country moved up the value chain to become the world's second-largest RMG exporter.

Experts argue that agro-processing could follow a similar trajectory — if the government and private sector act together. "Without processing industries, we are severely limited. The current slow pace needs a significant boost," says Jahangir Alam.

Key exporters such as PRAN-RFL Group, Bombay Sweets and Company Limited and Square Food & Beverage Ltd have already built regional footprints in the Middle East and South Asia. But their exports remain overwhelmingly diaspora-focused, with little penetration in Western retail chains.

To triple agro exports by 2030, Bangladesh will need a clear policy and investment roadmap. Experts call for establishing common facilitation centres for SMEs, launching accredited national food testing labs, and integrating export logistics within economic zones.

Investments in branding and marketing are equally important. Competing countries like Vietnam and Thailand offer coordinated government promotion of food brands through trade fairs and export promotion missions.

Bangladesh's duty-free access to 52 markets — including the EU and GCC — provides a valuable head start. But to capitalise on this advantage, the country must deliver high-quality, traceable and certified products.

The next phase of growth will depend on how quickly the country can shift from exporting raw commodities to exporting trusted brands. 

As Jahangir Alam sums it up, if we can increase processing, the value will naturally rise. "This increased value will undoubtedly benefit everyone involved."