In September 2021, Bangladesh Standards & Testing Institution (BSTI) added the provision of halal certification to the BSTI Regulations, 1989. This will allow BSTI to issue halal certificates for processed products, and in particular, processed food. The initial certificates will cover three years after which renewal will become necessary. Already more than 20 food exporters from Bangladesh have applied for BSTI's halal certificates.
Arrival of a new halal certificate issuing authority is expected to give the much-needed boost to the exportable halal items (mainly halal food) from Bangladesh. The major issue that hindered Bangladesh from tapping into the global halal market concerned certificates. There was a lack of a dedicted authority issuing halal certificates for exports; Islamic Foundation remained the sole issuer before BSTI entered the scene. With a new issuer, surely the task and responsibilities could now be shared.
As per the State of the Global Islamic Economy Report 2020/21, the size of halal food market had reached $1.17 trillion in 2019. It is expected to grow at 3.5 per cent per year to 1.38 trillion by 2024. With the increase in the global Muslim population, which is expected to grow twice as fast as the global population and reach 3.0 billion by 2060, the halal food market is also expected to grow further. Halal food is also gaining popularity among the non-Muslim community owing to its strict hygiene and lower contamination levels.
Bangladesh has been exporting halal items for some time now. During FY 2020-21, the country exported halal products worth about $1 billion, 70 per cent of which went to Muslimmajority countries. Notable companies to have received the halal certificates include Square, PRAN, ACI, Bengal Meat, Bashundhara, and Nestle Bangladesh. In fact, the majority of the companies from Bangladesh that have obtained hala certificates are engaged in the production and marketing of food products. The ones mentioned here had received the certificates from the Islamic Foundation, the only halal certificate issuer until now.
The acceptance of one country's halal certificates by another has often been observed to be difficult. This increases the cost and time involved. With two certificate issuers in the country now, we must look forward to a certificate that is globally acceptable. Policies should be framed to ensure that this high-quality certificate becomes a reality, thereby allowing Bangladesh to claim a greater share in the halal food market.
In case of exporting halal meat in particular, the biggest challenges concern compliance related to cattle rearing in disease-free locations and the processes involved in the pre-and post-slaughter stages. Certifying that the whole process complied with the required conditions involve strict monitoring and control, which is challenging indeed.
If we could overcome this hurdle and abide by the required standard, it would open new doors for halal meat export. As both Muslim and non-Muslim countries are witnessing an increase in demand of halal food, Bangladesh has a strong possibility of gaining ground there. The agriculture and food sector is the second-highest export earner of the country, and it stands to gain tremendously if this works. At the same time, we must also not overlook the domestic halal consumer market of $107 billion, which happens to be the second biggest market globally after Indonesia.
After the pandemic, especially with the graduate from the Least Developed Country (LDC) category and subsequent loss of preferential market access in the European Union (EU), Bangladesh should target both product and market diversification. Therefore, export of halal food must be prioritised. The whole process will involve successful coordination among multiple stakeholders like ministries, Islamic Foundation, BSTI, Food Safety Authority, and many others. At the same time, although BSTI is known for its association with international standards organisations, we must strive to benchmark ourselves with the top halal standard checking laboratories like those from Thailand and Malaysia. It is time to think about establishing a one-stop service point for halal certification. We hope and look forward to a halal certificate that is accepted by all, especially the Middle-East and Muslim-majority countries. That could well be the catalyst the country's processed food export needs.
The piece is originally published as editorial of Chamber News (Issue 10, October 2021), the monthly flagship publication of Metropolitan Chamber of Commerce and Industry, Dhaka.