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STEADY GROWTH DAIRY FARMERS ARE MOSTLY 90% OF THE MILK PRODUCED
IN MILK PRODUCTION IN BANGLADESH LANDLESS OR SMALLHOLDERS IS SOLD THROUGH INFORMAL
CHANNELS
4.00 4%
3.46 6% 10%
3.50
3.00
2.50
2.00
1.50
Million tonnes
90% 90%
1.00
0.50 Informal Formal
1-3 cows
channels channels
- 3-10 cows Public and
Milk sold directly
More than 10 cows to consumers in privateenterpr
2005 -06
2006 -07
2007 -08
2008 -09
2009 -10
2010 -11
2011 -12
Sweet producers,
tea shops, Processing plants
restaurants
Traders and
Chilling plants
wholesalers
Collectors Inputs
Feed and medicine
Financial services
Demand (million tonnes) (As per WHO recommendation 250 ml a day per person) 12.8 million tonnes
Growth in demand for milk and dairy products 10% per year
Milk Powder
The formal milk processors source about 50% of their milk supplies from local farmers and the other 50% via
imports of dairy products mainly skimmed milk powder.
Standardized Spray
Pre -heating Evaporation Packaging Storage Distribution
milk drying
100 litresof milk 12-12.5 kg of whole milk powder
Butter and Cheese
Number of local cheese enterprises 5-7 institutional producers among many unrecognised
producers
Local production of cheese in 2013 1,000 tonnes
Imported cheese in 2013 850-900 tonnes
Retail price of locally produced cheese USD 2.8-3 per 250 grams
(mozzarella)
Retail price of imported cheese (mozzarella) USD 3.5-4.5 per 250 grams
Number of butter producers 6-8 institutional producers among many unrecognised
producers
Local production of butter in 2012 1,820 tonnes
Imported butter in 2012 3,890 tonnes
Retail price of locally produced butter USD 8.5-9.5 per kg
Retail price of imported butter USD 12-15 per kg
Butter Processing
Butter is produced by churning milk cream. Demand for butter in preparing food is spreading in urban
households, hotels and restaurants in Bangladesh. It is usually sold in packages of 100-200 grams.
Cheese Processing
Cheese in made by coagulating milk protein. Farmer cheese commonly known as Paneer is the most available
variant of cheese in Bangladesh. Only fresh cheese is produced in Bangladesh due to the lack of demand for
ripened cheese.
Culture products
Cheese milk
Cheese whey
and inoculation
Cutting
Milk receipt, Addition and Extraction
filtration and Pasteurization of starter Coagulation Salting Ripening Packaging Distribution
cooking of whey
clarification culture of curd
5-10 litresof milk 1 kg of cheese
increased from high yielding breeds of cattle.
A.Q.M. Shafiqur Rouf, Deputy General Manager, BRAC AI Enterprise
Social Impact
Milk is an important source of nutrition and provides numerous health benefits such as stronger bone and teeth,
reduction in high blood pressure and decreased risk of cardiovascular diseases among many others. Moreover,
thousands of households in rural Bangladesh depend on their small dairy farms in securing a source of income.
Dairy enterprises employ and source milk from a large pool of people thereby lifting them out of poverty.
Cooperative models of dairy enterprises have proven to be successful in giving rural farmers access to new
marketsand improving their social wellbeing.
reduction in high blood pressure and decreased risk of cardiovascular diseases among many others. Moreover, agricultural economy of Bangladesh
SHARE OF
Utilizing the knowledge and skills of thousands of households in rural Bangladesh depend on their small dairy farms in securing a source of income. performing multifaceted functions such as
MILK YIELD BY
animal husbandry experts, quantity of milk can be significantly Dairy enterprises employ and source milk from a large pool of people thereby lifting them out of poverty. ensuring food security and source of 92.5 5.6 25.1
SPECIES (%)
increased from high yielding breeds of cattle. Cooperative models of dairy enterprises have proven to be successful in giving rural farmers access to new income, earning foreign revenue through IN 2007-08
marketsand improving their social wellbeing. export, supplying manure and fuel among
A.Q.M. Shafiqur Rouf, Deputy General Manager, BRAC AI Enterprise many others. YIELD
(KG/LACTATION)
IN 2007-08
Crossbred: 2016
Indigenous: 280 793 10.5
Business Incentives for Dairy investors STEADY GROWTH DAIRY FARMERS ARE MOSTLY 90% OF THE MILK PRODUCED
IN MILK PRODUCTION IN BANGLADESH LANDLESS OR SMALLHOLDERS IS SOLD THROUGH INFORMAL
Dairy feed is exempted from VAT Added Tax (VAT) CHANNELS
Import of dairy equipment is exempted from VAT and customs duty
4.00 4%
Provision for 100% foreign equity 3.46 6% 10%
3.50
Favourable loan facilities for entrepreneurs
3.00
In the national budget of FY 2013-2014, duty structures were changed to accommodate more investment in
2.50
local dairy production. Customs duty for powder milk import was increased from 5% to 10%. At the same time,
concessionary benefit was given by Statutory Regulatory Order (SRO) for insulated road milk tanker 2.00
(decreased from 5% to 2%), for animal feed (decreased from 5% to 0%), for raw milk preservatives (decreased 1.50
Million tonnes
from 12% to 0%), and also for different spare parts required for AI; supplementary duty (SD) on skimmed milk 90% 90%
1.00
powder at the manufacturing stage has also been withdrawn.
0.50 Informal Formal
In the national budget of FY 2014-2015, SD rate is reduced from 20% to 15% for butter and other fats and oils 1-3 cows
channels channels
derived from milk and dairyspreads, and duties and taxes on many raw materials, such as cow pregnancy test - 3-10 cows Public and
Milk sold directly
kits, universal syringe for AI, NaCl solution special grade used in AI, are fully exempted. More than 10 cows to consumers in privateenterpr
2005 -06
2006 -07
2007 -08
2008 -09
2009 -10
2010 -11
2011 -12
rural areas or to ises, dairy
traders in local cooperatives
For futher information, please visit www.boi.gov.bd or rural markets
DAIRY SUPPLY CHAIN IN BANGLADESH Pasteurized and Flavoured Milk MILK PROCESSING PLANT CAPACITY: Butter and Cheese
50,000-70,000 LITRES PER DAY
Formal and Informal Marketing Channels of Processing Milk Number of local cheese enterprises 5-7 institutional producers among many unrecognised
Number of dairy enterprises 15-20 producers
Both informal and formal milk-marketing channels coexist in Bangladesh. Smallholder milk producers supply all
the milk for the informal traditional market and three quarters of the milk for formal processing market. Average milk collection per day 800-1,300 litres Preliminary and Local production of cheese in 2013 1,000 tonnes
per chilling station
Cooperatives and institutional dairy enterprises collect milk from smallholders through primary village Preoperative
Milk price at source (based on fat USD 0.55-0.65 per litre
Imported cheese in 2013 850-900 tonnes
cooperatives and then process and distribute the milk to all major cities in the country. The cooperative model USD Land
content) Retail price of locally produced cheese USD 2.8-3 per 250 grams
has especially been successful in creating jobs, reducing collection and distribution costs and improving the 5.5-7.5
quality of milk. Average retail price during August USD 0.85 per litre Building (mozzarella)
million
2013-July 2014
Vehicles Retail price of imported cheese (mozzarella) USD 3.5-4.5 per 250 grams
INFORMAL/LOCAL MARKET FORMAL VALUE CHAIN Plant and machineries Number of butter producers 6-8 institutional producers among many unrecognised
Flavoured milk varieties Chocolate, mango,
banana,and producers
Misc. fixed assets
strawberry Local production of butter in 2012 1,820 tonnes
churning and freezing households, hotels and restaurants in Bangladesh. It is usually sold in packages of 100-200 grams.
Collectors Inputs Cream Whole
Milk Homogenization Butter milk Bulk distribution
Packing milk Culture products
receipt,
Feed and medicine filtration Storage Separation and Pasteurizat Skimmed milk Storage and Cream
and inoculation
Deodorization Distributi
standardization ion cold Milk
and storage on
Skimmed receipt, Churning Bulk Freezing, Consumer Chill
Veterinary services clarification milk filtration Pasteurization Cooling Ageing and Thawing
Homogenization
Household Dairy Whole milk Whole milk and working
packaging storage packaging storage
clarification
Producers
Artificial Insemination Milk Powder
23-25 litresof milk 1 kg of butter
The formal milk processors source about 50% of their milk supplies from local farmers and the other 50% via
Financial services imports of dairy products mainly skimmed milk powder. Cheese Processing
Cheese in made by coagulating milk protein. Farmer cheese commonly known as Paneer is the most available
INVESTMENT INSIGHTS ON DAIRY MARKET IN BANGLADESH Number of local producers 3 variant of cheese in Bangladesh. Only fresh cheese is produced in Bangladesh due to the lack of demand for
ripened cheese.
Within the formal dairy sector in Bangladesh, over 90% of the milk is processed as pasteurized packaged milk Average retail price of locally USD 7.36 Shortage in milk supply is met by imported milk powder
and only 10% is processed into cheese, butter, ghee and milk powder. Key leverage points for expanding the produced milk powder during per kg
80,000
dairy market are cattle feed production, improved breeds of high yielding cows, milk collection points, dairy cold August 2013-July 2014 Culture products
Cheese milk