Vegetable exporters in trouble as Biman hikes freight charges

Exporters have suspended shipment of fruits, vegetables and other perishable products to some Middle East countries as Biman Bangladesh Airlines has recently raised freight charges.
Biman was the exporters' preferred carrier due to its low charges and foreign airlines' reluctance to carry such products.
Biman raised the freight charges by 20 percent on the Middle East routes early this month, said SM Jahangir Hossain, president of Bangladesh Fruits, Vegetables and Allied Products Exporters Association.
So they suspended shipments to seven destinations in five countries -- Saudi Arabia, Kuwait, United Arab Emirates, Qatar and Oman.
However, the exporters yesterday resumed shipment to one destination -- Qatar, as Biman brought down the charges for the route from 20 percent to 7 percent, said Mohammed Monsur, general secretary of the association.
Biman's cargo fare is now more than that of the foreign carriers operating in these destinations.
It now costs Tk 108 to ship each kg of perishable goods to Saudi Arabia by Biman as against Tk 100 by Saudi Airlines, Monsur said.
On the Dubai route, Biman now charges Tk 105.36 for each kg of goods, 7-10 percent higher than that of the foreign carriers such as Fly Dubai, RAK Airways and Air Arabia, he said.
The exporters have also been facing problems for years due to limited space for perishable goods in cargo planes.
The hike in Biman charges has worsened the situation, the association said.
Bangladesh usually exports around 20 tonnes of fruits, vegetables and allied products a day to Jeddah, Riyadh, Dammam, Dubai, Doha, Kuwait City and Muscat, said Monsur, who operates Monsur General Trading Company. Bangladesh will now lose a huge amount of foreign currencies, he said.
Exporters and importers of perishable goods usually ink business deals and set prices at the beginning of a year.
“We have already set the rates for the entire year on the basis of the previous freight charges," Monsur said.
Many importers will now buy fresh fruits, vegetables and betel leaves from India, Pakistan, Thailand and Sri Lanka, he said.
The export suspension came at a time when the demand for Bangladeshi fruits and vegetables is growing up in the ME countries due to better quality of the produce.
Overseas shipment of these products rose by 22.95 percent to $134 million in fiscal 2011-12, according to Export Promotion Bureau.
Bangladesh exports various vegetables such as bitter gourd, brinjal, okra, bean, green chilli, cauliflower, sweet potato and cabbage.
Fruits include mango, jackfruit, pineapple, guava, watermelon, lychee and lemon, while the allied products consist manly of betel leaf and coriander leaf.
Expatriates from Bangladesh, India, Pakistan, Sri Lanka and Nepal are the main consumers of these fruits and vegetables.
More than 55 percent of Bangladeshi fruits and vegetables go to the ME countries, according to the exporters.
They urged the Biman authorities to withdraw the new rates.
Biman increased the freight rates as part of a move to turn the carrier into a profitable one, said Kevin Steele, its newly appointed managing director and chief executive.
“We are of course sorry we have had to raise prices, but in many cases that is only to the levels charged by our competitors,” he said.
“Biman is making huge steps to becoming a profitable airline, and the profitability of our cargo products is very important,” said Steele, who joined the airline last month as the first ever foreign chief executive of Biman.
The new fare will not affect Biman as the demand is huge and it cannot be met by the current capacity of the airline, he said.