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The agro-based processed food market has expanded at the local level much faster than abroad amid relaxed enforcement of rules for food safety in the country. 

Available data show that the overall processed food market has grown to $8 billion in Bangladesh with an 8 per cent annual growth rate against the meagre export market of $341.73 million in the financial year of 2023-24 from $300 million in 2016-17.

The processed food industry could have been grown further had the country not suffered wastages of food — 8 to15 per cent of rice lost after harvest and 20 to 40 per cent of fruits and vegetables wasted — worth $ 2.4 billion, according to the World Food Programme.

Agricultural food engineers blamed the absence of good agricultural and manufacturing practices for the uneven growth of business between the local and external levels in the sector, though the sector has a huge potential to contribute to the country’s export basket.

‘You cannot enter the international market with unsafe food,’ said Md Abdul Alim, head of the Department of Food Engineering and Technology at Bangladesh Agricultural University.

The global food processing companies have to maintain certain regulations, standardisation and safety requirements from the cultivation to manufacturing levels to compete on the international processed food market that represented worth some $2.09 trillion in 2024, he said.

The overuse of pesticides, lead-contaminated soils, and microplastics in water remain main hurdles to ensuring food safety, said agricultural food engineers, while describing the overall agricultural practices in the country.

So, the concentration on the local market in the absence of strict food safety regulations looks more favourable for entrepreneurs, said Md Wadud Ahmed, the chair of the Department of Agricultural Engineering at Sher-e-Bangla Agricultural University

The growing urbanisation and middle class, coupled with changes in food habits, have largely been attributed to the strong growth of the agro-food processing industry contributing about 1.7 per cent to the gross domestic product and employing about 2,50,000 people.

The share of processed food in the total exports now stands at around 3.5 per cent, thanks to frozen food products, tea, spices, fruits, including dry fruits,  according to the Bangladesh Investment Development Authority.

Admitting that the lack of good agricultural practice is a major problem for the export, the processed food entrepreneurs said that they also faced many other problems.

Food additives and imported raw materials such as sugar and edible oil became costly due to the devaluation of the local currency, said Bangladesh Agro-Processors Association general secretary Iqtadul Hoque.

The prices of sugar and edible oils have remained at elevated levels for the past three years allowing the country’s rivals to take advantage of Bangladesh’s on the export market. 

Besides, the export-oriented processed food entrepreneurs depended on imports for the packaging materials, some of which face up to 87 per cent import duty.

None can compete on the international market paying so much duty when you outsource raw materials from rival countries, said the BAPA general secretary.

The country’s overall export basket, which boasted $48.28 billion at the end of 2024-25, is largely dominated by knitwear and woven item home textiles accounting for over 85 per cent of the overall growth.    

The government has been offering cash incentives, also known as export subsidy, for the export of processed agricultural products at a rate of 20 per cent to expand the narrow export basket ahead the country’s graduation from the least developed countries’ bloc from the next year.

Agricultural food engineers said that the export subsidy could not alone change the trend while highlighting the needs for pursuing agricultural and manufacturing good practices.

They also underscored the needs for collaboration between the agricultural universities and the agro-processed food industries to remove the problems so that the low-hanging fruits can be obtained.

The maintenance of the compliance and enforcement issues even allows many non-Muslim countries to send halal products to the petro-dollar rich Arab countries, noted Abdul Alim.

Established in 2013, the Bangladesh Food Safety Authority, the national food safety regulatory agency, is largely busy with capacity building of its officials.

Its ongoing project titled ‘Strengthening the Inspection, Regulatory, and Coordinating Function’ worth Tk 42.2 crore, funded largely by the Japan International Cooperation Agency, will be completed in the next year.

The Bangladesh Food Safety Authority has already completed a capacity building project at Tk 88.05 crore in the past year.

Food adulteration with harmful chemicals is common in Bangladesh.

Consumer Association of Bangladesh general secretary Humayun Kabir, referring to CAB findings, said that food contamination and consumer exposure to food hazards had major implication on the food security and consumers health in the country.

Exporter Guide Annual published on July 15, 2025 by the US Department of Agriculture and the Global Agricultural Information Network said that the food processing industry in Bangladesh had approximately 1,000 value-added food processing companies.

The $8 billion food processing sector in Bangladesh grows on average by 8 per cent annually, but faces challenges of securing safe and high-quality ingredients.

The market of agricultural-based packaged processed edible oils, flour, dairy products, and snacks mainly targets local consumers and grew $7.3 billion in 2023 from $5.2 billion in 2018.