Summary of Fresh Potato export project

Product Fresh Potato

Type: Diamond, Pakri, Granola, Cartinal

Earlier exported Fresh Potato: 396 MT = USD 1,18,000 only

Fresh Vegetables: USD 40,000 (Approx.)

Exported through Havesun Associates

Export Target 2021 1760 MT

Exporting Countries Malaysia/Nepal/ Singapore/Sri Lanka/Maldives.

Total procurement cost Tk. 2,11,20,000(Approx.)  

Expected Profit USD 1,32,000 = Tk. 1,05,60,000(Approx.)

Bank Finance required (70%) Tk. 1,47,84,000

Sponsors Equity (30%) Tk. 63, 36,000

Collateral security 1. House # 07, Main Road, Uttara, Turag Thana 

(Adjacent to Uttara Sector 17), Land #  05 decimal.
Approx Valuation: 1.30 crore (Earlier  Tk. 70 Lacs
loan sanctioned from  Islami bank, Shyamoli Br.)
2. Chandpara, Uttarkhan,  P.S. Uttarkhan. 
Land: 5 Katha. Approx valuation: 1.40 crore.
Fresh Potato Export scenario

Bangladesh is the sixth-largest potato producer in the world as for the past
several years farmers have produced higher amounts of the vegetable than the
annual requirement.

The government provides a 20 per cent cash incentive to accelerate potato

exports and protect farmers from the risk of losses.

The main season of fresh potato export begins from February after the harvest in
January and continues until May.

The demand for potatoes from buyers abroad is high but exporters of
Bangladesh could not cater in full because of increased prices in the domestic
market

Last year Fresh Potato export was not exported up to the mark for the Global
pandemic and shut down. Besides, potatoes were distributed as food aid to
support poor people during the shutdown.

Farmers mainly grow several varieties of potatoes, namely Diamond and

Granola, for household consumption apart from other varieties like Asterix,
Cartinal, Pakri, Romana and Lady Rosetta for agro-processing.
We exported Fresh Potato since last 2016 mainly to Malaysia. We exported two
20’ FCL containers to Malaysia in the year 2016 in the banner of Havesun
Associates. In 2017 we exported 5 x 20’ FCL Fresh potato to Malaysia. In 2019 the
export was approx 200 MT. Besides Fresh Potato, we exported different types of
Fresh vegetables to Kualalapur, Malaysia by Air consignments. The approx.
value was USD 40,000 with a number of shipments.   

This year Bangladesh expects a bumper yield of Fresh Potato. So, the price would
be within the reach.  Earlier buyers in Malaysia, Singapore and Sri Lanka used to
import Fresh Potato from Pakistan as the price was competitive. If the price
remains competitive we expect to catch the aforesaid markets.
Now is the time we can think of exporting Fresh Potato. We have contacts in
Nepal and Sri Lanka where Fresh potato can be exported. 

Export Plan:
In the year 2021 we are planning to export Fresh Potato to Malaysia, Nepal, Sri
Lanka, Singapore, and Maldives. The export forecast would be as follows:

Export to Malaysia:
25 Unit 40' HQ FCL x 28 MT = 25 x 28 = 700 MT = 7000000 kg
Total procurement cost = Tk. 12/kg x 700000 = Tk.84,00,000

Export to Nepal: 
50 Truckload x 10 MT = 500 MT = 500000 kg
Cost = Tk. 12/kg x 500000 = Tk. 60,00,000

Export to Sri Lanka:

10 Unit 40' HQ FCL x 28 MT = 10 x 28 = 280 MT = 280000 kg
 Total Procurement cost = Tk. 12/kg x 280000 = Tk. 33,60,000

Export to Singapore and Maldives: 

Assuming 40’ HQ FCL Export orders from Singapore and Maldives the
procurement cost would be  Tk. 33,60,000  

Besides the above, we expect this year our Government will take
adequate measures so that countries such as Russia and Indonesia removes the
restrictions placed on the entry of Bangladeshi potatoes. If the ban is not there we
expect to have bulk orders from Russia as Russia is a potential market for Fresh
potato export.   
The total quantity of Fresh Potato would be  (700 + 500 + 280 + 280) = 1760 MT

Cost of 1 MT Fresh Potato would be Tk. 12 x 1000 = Tk. 12000 only.

(Considering Tk. 12/kg export worthy Fresh Potato including all cost)
 
Cost of 1760 MT = 1760 x 12000 = Tk. 2,11,20,000 only  

We want the bank to finance 70% {(Tk. 1,47,84,000) of the total procurement
cost. 
Rest 30% (T. 63, 36,000) would be financed by the sponsors. 

Economics of  1 x 40’ FCL Fresh Potato

 
Mainly Granola type Potato is exported from Bangladesh as the price of this type
is cheaper. This year less stock of Granola type Potato in our country. So, we
prefer Diamond/Pakri type Potato. Pakri has high demand to the importers.

Packing: Export worthy 5/10/20 Kg Mesh bag

Type: Fresh Potato Diamond/Granola  (One 40’ FCL contains 28000 kg)
  
Cost of 28 MT Potato: (@ Tk. 17/kg)        BDT 4,76, 000.00 :
Carrying to port, Sorting, Sizing etc.           BDT    50,000.00
Container freight                                         BDT     64,000.00
C&F, Documentation etc.                            BDT     15,000.00
                          BDT  6,05,000.00
 = USD 7562/ MT = USD 270.00/MT 
 
There are 20% incentives offered by Govt. in Potato export which can be
calculated as the main profit. Assuming USD 300/MT selling price per MT profit
would be USD 30.00 only. For one container the profit would be 30 x 28 = USD
840/container
 
Considering USD 45.00/MT (less 5% other costs) incentive 1 container amount
would be USD 1260.00 only. 
 
Profit of 1 container Fresh Potato would be USD 2100.00 only.

Net profit for 1760 MT would be USD 1,32,000 = Tk. 1,05,60,000 only