Originally posted in The Daily Sun on 8 January 2026
Weak supply chains erode Bangladesh’s global competitiveness
Bangladesh’s agricultural sector has long been seen as a pillar of domestic food security and a potential engine for export growth. Yet experts warn that entrenched weaknesses in supply chains and logistics are steadily eroding the country’s competitiveness in global markets, threatening both farmers’ incomes and future export prospects.
Industry insiders and economists argue that without urgent modernisation – including investment in transport networks, cold-chain systems, storage facilities, port logistics and export documentation – Bangladesh will struggle to realise the economic and social returns from its agricultural productivity.
These vulnerabilities are likely to become more acute as the country prepares to graduate from least developed country (LDC) status in November, when current cash incentives and preferential trade benefits will be phased out.
“Bangladesh is losing competitiveness in the global market compared with its peers because of weak supply chain management,” several experts said, pointing to high transport costs, inadequate infrastructure and procedural delays that inflate the cost of doing business.
Lagging behind regional competitors
International indices underline the scale of the challenge. Bangladesh ranked 105th in the Global Competitiveness Index in 2019, well behind India (68th) and Vietnam (67th). In the World Bank’s Logistics Performance Index (LPI) 2023, Bangladesh placed 88th out of 139 countries, compared with India at 38th and Vietnam at 43rd.
Port performance is an even starker weak spot
The World Bank’s Container Port Performance Index (CPPI) 2023 ranked Chattogram port at 334, while India’s Jawaharlal Nehru Port ranked 96th, Chennai 80th and Mundra 27th. Vietnam’s Haiphong port was placed 70th. Bangladesh also ranked 176th globally in the World Bank’s “trading across borders” indicator in Doing Business 2020, compared with India at 68th and Vietnam at 104th.
Dr M Masrur Reaz, chairman of the Policy Exchange of Bangladesh, said trade facilitation had become a critical driver of competitiveness. “It refers to measures that reduce the costs and barriers to trade beyond traditional policy tools,” he said.
He called for technology-based automated logistics management, simplified and coordinated laws and regulations, and full automation of customs and clearance processes to cut costs and delays.
High costs, inefficient transport
Bangladesh’s logistics system remains heavily road-dependent, despite roads being the most expensive and least efficient mode of freight transport.
More than 80% of freight moves by road, while rail accounts for just 4%, pushing logistics costs close to 20% of export expenses – among the highest in Asia.
The country has around 21,000 kilometres of paved roads, 2,706 route kilometres of railways and 5,200 kilometres of perennial waterways, expanding to 8,372 kilometres during the monsoon. Yet congestion, slow speeds and poor maintenance continue to hamper efficiency.
“If logistics costs are reduced by 25%, exports can increase by 20%,” Dr Reaz said. “A 1% reduction in transportation cost can lead to a 7.4% increase in exports, and reducing dwell time by one day can raise exports by the same margin.”
He added that setting a minimum average speed of 40km an hour could lift exports by 3.7%. “If there were no congestion, total costs borne by truck operators would be 35.5% lower on average, and in-transit inventory carrying costs would fall by 84%,” he said.
Weak links in the value chain
Beyond transport, fragile links between farmers and processors are undermining value addition. According to Dr Reaz, these weaknesses lead to poor product quality and high post-harvest losses, especially for perishables.
“Inadequate infrastructure, a fragmented cold chain and limited rural storage cause significant spoilage,” he said. “Small firms are particularly vulnerable because they lack resources for temperature-controlled logistics.”
Regulatory and policy hurdles compound these problems. Dr Reaz noted that a lack of accredited testing laboratories and inconsistent quality standards make it difficult for Bangladeshi products to access markets such as the EU and the US. Recurring export restrictions and non-tariff barriers further weaken competitiveness.
Heavy losses from poor infrastructure
The Food and Agriculture Organization estimates that Bangladesh loses about 30% of its total agricultural production each year because of inadequate processing and storage facilities.
Experts say infrastructure investment is needed at every stage of production to curb this waste. Kamruzzaman Kamal, director of marketing at Pran-RFL Group, pointed to insufficient port capacity, poor road maintenance and unreliable utilities as key bottlenecks.
“Inadequate cold storage, limited temperature-controlled transport and energy constraints – especially unstable electricity supply – significantly impede the movement of fruits, vegetables, dairy and other perishables,” he said.
Electricity is available for only 10-12 hours a day in many rural areas, raising costs and undermining quality, particularly for cold-storage-dependent products.
High interest rates, complex procedures for opening letters of credit to import raw materials, and lengthy clearance processes further discourage investment.
Despite employing nearly 40% of the workforce, Bangladesh’s agricultural exports remain below $1b a year. By contrast, Kamruzzaman noted, the Netherlands – far smaller in size – exports agricultural products worth more than $100b annually.
“To reach even a fraction of that level, Bangladesh needs proper planning and strategic investment,” he said.
Falling confidence among farmers and exporters
Bangladesh has an estimated 16.5–17 million farming households, producing more than 70 million tonnes of agricultural output annually, according to the Bangladesh Bureau of Statistics.
The country exports around 700 agricultural products, including 63 basic agro-processed items. Of roughly 1,000 processed food producers, only about 250 are involved in exports, and just 20 are classified as large or medium-sized firms.
The domestic packaged food market, valued at $4.8b in 2025, is projected to reach $5.8b by 2030.
Agro-processed exports are growing but still account for only about 1.5% of total exports.
Farmers and entrepreneurs say persistent constraints are sapping confidence. Post-harvest losses remain severe, with 30%-40% of fruits and vegetables spoiling because of poor storage and transport.
Industry insiders estimate that 60%-70% of the workforce lacks the skills needed to meet international quality standards and certification requirements.
“From farmers to exporters, people are losing interest in the sector,” Kamruzzaman said.
He cited poor transport and logistics, high post-harvest losses, limited access to affordable credit for small farmers, price volatility, weak infrastructure and inadequate utilities such as water, electricity and gas.
He also highlighted the absence of world-class testing laboratories and weak industry–academia collaboration.
Cold storage and coordination gaps
Bangladesh has 492 cold storage facilities, of which 36 are currently shut, according to the Bangladesh Cold Storage Association.
The remaining facilities have a combined operational capacity of about 3.06 million tonnes, storing potatoes, fruits, fish, spices and vegetables.
Industry leaders say this is insufficient and poorly distributed to support a modern export-oriented supply chain.
Md Iqtadul Hoque, general secretary of the Bangladesh Agro-Processors Association, said modern supply chains could significantly reduce business costs and improve competitiveness. “Otherwise, Bangladesh will continue to lag behind in the global market,” he warned.
Dr Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue, stressed the need for greater investment in research and development, particularly in food technology and cold-chain logistics.
“Inefficient supply chains and a lack of cold storage exacerbate wastage, reducing profitability for farmers and processors alike,” he said.
He also called for streamlined administrative processes. Businesses are often required to submit identical documents – including trade licences, fire licences, VAT certificates, packing lists and bank solvency statements – to multiple agencies for imports, exports, licensing and production. “This redundancy increases costs and delays,” he said. Modernising utility governance is equally critical, Dr Moazzem added, citing recurring power outages, unstable supply and unpredictable energy pricing as major deterrents to productivity and investment.
A narrowing window
As Bangladesh approaches LDC graduation, the window for reform is narrowing.
Experts broadly agree that coordinated action by government and the private sector – from infrastructure investment and regulatory reform to skills development and technology adoption – is essential to prevent further erosion of competitiveness.
Without decisive improvements to supply chains and logistics, they warn, Bangladesh risks squandering the potential of a sector that employs millions and underpins the country’s food security and export ambitions.
This report is the final instalment of a three-part series.
