DHAKA, Oct 26: Bangladesh frozen food industry is in crisis as economic slowdown in the West has sliced the price by half, industry sources say.

For Bangladesh, frozen food sector is the country’s second highest foreign exchange earner and with the fall in price and demand in export markets, the industry is facing a serious setback.

The September 11 terrorist attacks in the US has actually accelerated the pace of economic slowdown that had been affecting the US and other industrialized countries since late 2000.

The mainstay of the frozen food sector in Bangladesh is shrimp and the standard price was hovering around US$8 per pound before July 2000. However, the combination of over production in India, Vietnam and Indonesia and the economic slowdown in the world’s major markets propelled the shrimp price downward to around $5 per pound. But that was before the September 11. The price plunged further to between $3.7 and $3.5 per pound of shrimp after the attack.

The US, Japan and the European Union import 30 per cent each of total frozen food export from Bangladesh while only 10 per cent find market elsewhere. Shrimp is considered a luxury item and with the sign of an impending recession its consumption in the major markets along with other luxury goods went down.

During the first quarter of current fiscal (July-September 2001), frozen food worth $86.5 million was exported compared to $133 million during the same period last year — down by about 35 per cent. According to industry sources, in the last five weeks, importers have cancelled 121 letters of credit and in addition, purchase order worth Taka 1.5 billion (nearly $27 million).

Golam Mostafa, former president of Bangladesh Frozen Food Exporters Association (BFFEA) says that the present crisis will have a long-term negative impact on the country’s export earning from this sector. “Even we can’t sell stocks at the current low prices, as a result, exporters are facing huge capital loss every passing day,” he added.