Bangladesh's agro-processed food and vegetable exporters report losses as the Middle East war disrupts Gulf trade routes, delays shipments, and increases freight costs.
Exports to markets such as the UAE, Qatar, Bahrain, and Kuwait have declined due to cancellations and delays. Some agro-based food companies are restructuring operations to manage liquidity and reduce losses.
One exporter has suspended domestic supply due to fuel shortages and concerns over power outages, while prioritising higher-margin essential products. Production of non-essential items is being reduced, with a focus on preserving raw materials and limiting waste. The company is also accelerating the recovery of outstanding payments and relying on existing inventories to maintain supply.
"Raw materials should be preserved rather than used for non-essential products. We are focusing only on basic items with better margins, while avoiding low-margin production given the severity of the crisis," a senior official said.
Industry sources indicate that continued disruption to Gulf trade routes may lead to export losses for perishable products unless alternative logistics and market diversification are implemented.
Proshanta Kumar Ghosh, DGM (Export) of ACI Foods Limited, said most carriers are unwilling to accept containers routed through the Strait of Hormuz, forcing exporters to halt shipments or seek alternatives.
"As a result, our key markets in the Gulf are now fully stocked," he said, adding that shipments via the Red Sea through Jeddah are continuing under constraints.
Freight costs have increased, with rates for a 20-foot container to Jeddah rising to $5,000 from around $2,000. "Even our previously negotiated rate of $1,900 per container is no longer being honoured, and we are now shipping at $5,000," he added.
Exporters are also facing container shortages as shipments are diverted to alternative routes. Buyers are delaying purchases due to supply chain uncertainty.
Kabir Ahmed, former president of BAFFA, said trade with the Gulf has stalled due to the disruption to the Strait of Hormuz. Some fuel shipments continue, while trade with Saudi Arabia is partly maintained via air freight at up to 40 per cent of normal volumes.
Air connectivity with Dubai, the UAE, Qatar, Oman, and Bahrain has been largely suspended, affecting trade in perishable products. Eleash Mridha, Managing Director of PRAN Group, said exports to Saudi Arabia continue through Jeddah airport and shipments to Oman remain uninterrupted, while exports to Dubai and Qatar have stopped, representing around 35 per cent of the company's regional exports.
Bangladesh exports agro- and processed food products worth around $40 million to $45 million annually to the Middle East, while the broader agro sector generated about $65 million in the last fiscal year.
Source: The Financial Express
