Bangladesh Agribusiness Report Q3 2014 - New Market Study Published

From: Fast Market Research, Inc.
Published: Mon May 19 2014

We hold a cautious outlook towards the Bangladesh agriculture sector. While it comes from a low base, structural problems still plague the industry. In the medium term for example, the frequent occurrences of strikes, or hartals and road bloackages will keep our optimism for the industry at bay as these often aggravate the logistical challenges of food transportation within the country, causing the biggest hurt to the farmers. Industry estimates place last year's damage to the poultry industry BDT 3.8bn between October to December 2013, also causing 30% of farms to shut down.

Over the long term, we believe that there is much more room for growth and improvement in sub-sectors such as grains and livestock. That said, as the agriculture sector in Bangladesh employs close to 70% of the working population but contributes to only 20% of the country's GDP, there is also an obvious need for improvement in efficiency of operations.

Key Forecasts

* Rice production growth to 2017/18: 9.0% to reach 37.7mn tonnes. Over the longer term, the introduction of an 'input distribution card' to 9mn small farmers will very likely help them to obtain cash subsidies for these inputs and boost productivity.
* Wheat consumption growth to 2017/18: 12.7% growth to 4.9mn tonnes. The main drivers of this growth will be increased per capita consumption and population growth, with the population of Bangladesh forecast to grow by 5.9% to 166.0mn people in 2018, from 156.6mn in 2013.
* Poultry production growth to 2017/18: 12.2% to 239,000 tonnes. Better economic conditions and higher disposable incomes will help to drive demand for meat. Better disease control is also expected to support the recovery of the sector.
* 2014 real GDP growth: 5.7%, down from 6.0% in 2013. Predicted to average 6.2% from 2014 to 2018.
* 2014 consumer price inflation: 7.5% year-on-year (y-o-y) average, down from 7.7% y-o-y in 2013. Predicted to average 6.8% from 2013 to 2018.
* 2014 central bank policy rate: 6.75% average, the same level down from 7.25% s in 2013. Predicted to average 6.9% from 2013 to 2018.
* BMI universe agribusiness market value: US$18.3bn in 2014 (down from US$18.9bn in 2013; forecast to grow annually by 2.1% on average to 2018)

Full Report Details at

Key Developments

We look favourably towards the nationwide free 'agriculture call centre' which is a form of public-private partnership. This scheme will benefit the country's 20 million farmers by allowing them access to free agricultural information about prices and crop production.

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