LocationsBlue Gold 2.0: Scaling CXB’s Dry Fish Heritage with AI and Data-Driven Strategies for the Local and International Tourism Market — Evidence from Bangladesh
November 16, 2025
By Ramiz Uddin, PhD; Head of Experimentation, UNDP Accelerator Lab Bangladesh.
Mejanur Rahman, Applied Statistics and Data Science, University of Dhaka.
Osama Bin Tahir, Applied Statistics and Data Science, University of Dhaka.
1. Background and Context: The Genesis of the Shutki Palli
Food preservation, notably drying fish, is an ancient, globally vital practice for food security. In Bangladesh, where fish and rice are central to life, this method is most concentrated in Nazirar Tek, Cox's Bazar—known as the Shutki Palli (dried fish village). This area is a complex socio-economic hub, embodying traditional knowledge, informal labor, and environmental vulnerability.
The dry fish industry holds significant global and regional importance, serving as the fourth-largest source of consumed fish in Bangladesh, particularly for the rural poor who need low-cost protein. The umami-rich shutki is a cultural staple.
Nazirar Tek's growth into the country's largest dry fish hub is rooted in displacement following the catastrophic 1991 cyclone, which drove thousands of homeless families to the sandbar. They turned their traditional fishing knowledge into an informal, colossal industry, with approximately 95% of households involved. The labor force is marginalized, including climate migrants and Rohingya refugees, and is heavily gendered—women and children perform the grueling processing work.
Despite operating in a precarious, cyclone-vulnerable environment, the village's economic pull is strong. It is a critical hub, producing an estimated 150,000 metric tons annually, meeting roughly 85% of the national dried fish demand. The area represents a living system where culture, climate risk, livelihoods, and informal markets converge.
2. The Supply Chain: Anatomy of an Informal Industry
The transformation of a fresh, perishable marine organism into a shelf-stable commodity involves a complex, multi-layered supply chain. This value chain is characterized by a high degree of fragmentation, reliance on informal credit, and a distinct hierarchy of power that often disadvantages the primary producers.
2.1 Primary Production: The Catch and The 'Khola.'
Figure 1: Dry fish processing at the khola in Nazirar Tek, Cox’s Bazar—illustrating key stages of primary production, including sorting, cleaning and gutting, washing, and sun-drying on bamboo racks.
Loitta (Bombay Duck), Chhuri (Ribbon Fish), high-value Rupchanda (Pomfret), Powa (Croaker), and Shrimp. Upon landing at Cox's Bazar's Fishery Ghat, the catch is immediately auctioned to Khola (drying yard) owners or fresh fish traders. The purchased fish is then transported to Nazirar Tek for immediate processing to prevent spoilage.
Processing steps include:
Sorting: Women laborers segregate fish by species and size.
Cleaning and Gutting: Larger fish are gutted/split; modern practices now encourage gutting even smaller fish like Loitta to improve quality.
Washing: Traditionally with channel water, but modern efforts promote clean tube-well water.
Drying: Fish are spread on ground mats or hung on raised bamboo racks (macha). The process takes 3 to 7 days, depending on size and weather conditions.
Figure 2: The dried fish value chain is a linear progression from catch to consumer, but each stage represents a distinct economic interaction and opportunity for value addition or loss.
2.2 The Middlemen and Market Structure: The "Syndicates."
Asadganj wholesale market, which handles 70-80% of the national supply. The Dadon system governs the relationship, wherein Asadganj wholesalers (Aratdars) provide upfront credit to producers, who are then bound to sell their entire output to that Aratdar at below-market prices. Exploitation occurs through a 3,000-4,000 BDT (USD 25-33) per 100,000 BDT (USD 818) commission and systematic weight manipulation, leading to a reported 5-7 kg "loss" per 100 kg consignment. Due to debt bondage and a lack of storage, producers are price-takers; the Asadganj "syndicate" colludes to keep procurement prices artificially low, especially during peak seasons.
2.3 Economic Analysis: Margins and Value Addition
Academic analysis of the value chain reveals a stark asymmetry in profit distribution. While the primary producers bear 100% of the production risk (weather, spoilage, raw material price fluctuation), they capture a disproportionately small share of the final value.
Table 1: Distribution of Profit Margins Across the Value Chain
| Stakeholder | Role | Estimated Value Addition | Risk Profile |
| Fishermen | Catching raw fish | 10-15% | High (Sea safety, fuel costs) |
| Dried Fish Processor (Producer) | Drying, processing | 15-20% | High (Weather, spoilage, labor) |
| Local Agent (Faria) | Aggregation, transport | 5-8% | Low (Logistics only) |
| Wholesaler (Aratdar) | Storage, financing, bulk break | 30-40% | Medium (Market fluctuation, credit risk) |
| Retailer | Final sale to consumer | 20-30% | Low (Inventory management) |
The table illustrates that the mid-stream actors (wholesalers) and downstream actors (retailers) capture the bulk of the value, primarily due to their control over capital and market access.
2.4 Logistics and Modern Shifts
The traditional supply chain is heavy on physical logistics. Dried fish is bulky and sensitive to moisture. Transport relies heavily on trucks moving goods from Cox’s Bazar to Chittagong and then to Dhaka. Recently, courier services have emerged as a disruptive force. Small-scale producers, empowered by digital marketing, are beginning to ship directly to consumers via courier, bypassing the Asadganj syndicate entirely. However, the cost of courier services (approx. 50 BDT/kg) remains a barrier to scaling this direct-to-consumer model for lower-value fish.
3. Health and Nutritional Profile: The Superfood of the Coast
Dried fish, or shutki, is recognized as a "hidden superfood" and a vital protein source for nutritionally vulnerable populations in Bangladesh. The drying process concentrates nutrients, resulting in a product that is 40% to 70% protein by weight, nearly triple that of fresh fish. Small Indigenous Species (SIS) like Mola and Kachki are especially rich in crucial micronutrients, including calcium, iron, zinc, and Vitamin A, while species like Rupchanda and Loitta retain beneficial Omega-3 fatty acids.
Despite these benefits, the industry faces a health paradox due to contamination risks from informal processing:
Pesticide Residues: Some processors illegally use organochlorine pesticides like DDT to prevent infestation by flies and beetles during humid weather, creating a significant health risk.
Microbial Load: Pathogens such as E. coli and Salmonella are introduced when fish are dried on the ground or washed with turbid channel water.
Lipid Oxidation: Exposure to direct sunlight causes fats in the fish to oxidize and become rancid, which produces harmful free radicals.
This dichotomy drives the urgent need for modernization initiatives to ensure the product is both nutritious and safe.
4. Key Problems and Structural Constraints
The producers of Nazirar Tek operate within a "risk-rich, resource-poor" environment. The challenges they face are systemic, spanning environmental, economic, and social dimensions.
Environmental Vulnerability
The industry relies on unpredictable weather for sun-drying, making it highly vulnerable to climate change-driven erraticism (e.g., unseasonal rain causing spoilage). As a frontline cyclone zone, the low-lying settlement and its khola infrastructure are prone to inundation and being washed away by tidal surges.
Economic Bottlenecks
The sector suffers from capital starvation; formal banks deem it high-risk, forcing producers into debt cycles with dadon (moneylenders/wholesalers). The critical lack of community cold storage prevents producers from managing supply (storing fresh fish during gluts or dried fish for better market prices), leading to mandatory "distress selling."
Infrastructure and Hygiene
Processing areas lack basic sanitation, including potable water and proper drainage, compromising hygiene through the use of contaminated water and poor waste management. Chemical dependency (pesticides) is a direct consequence of this infrastructural failure, used as the only "insurance" against infestation without mechanical dryers or cold storage.
5. UNDP Accelerator Lab and Uttaran Training and Interventions: A Model for Transformation
In response to these multifaceted challenges, the United Nations Development Programme (UNDP), in collaboration with Uttaran and the Government of Bangladesh, launched the "Sustainable Dry Fish" initiative. This project serves as a case study in how development interventions can upgrade informal value chains.
5.1 The "Safe Dry Fish" Methodology
The core of the intervention is the standardization of "Safe" production. This involves a protocol shift from traditional to hygienic practices:
Input Management: Ensuring the use of clean, potable water for washing fish, sourced from deep tube wells rather than surface channels.
Improved Drying Technology: The introduction of Fish Dryers (polytunnel solar dryers) and raised bamboo racks covered with mosquito nets. These physical barriers prevent flies from laying eggs on the fish, thereby removing the need for chemical pesticides. The elevated racks also facilitate better airflow, speeding up the drying process and preventing contamination from ground dust.
Organic Preservation: Training producers in the use of turmeric water and brine solution as natural preservatives, which have antimicrobial properties without the toxicity of synthetic pesticides.
5.2 Institutional Building and Social Capital
Technology alone is insufficient without social organization. UNDP Accelerator Lab facilitated the formation of producer groups, such as the "Ocean King Dry Fish Group".
Collective Bargaining: By organizing into cooperatives, small-scale producers can aggregate their produce and negotiate better terms with wholesalers, or bypass them entirely.
Financial Inclusion: These groups were assisted in opening formal bank accounts, a crucial step in decoupling from the dadon system. The project also provided seed capital (cash grants) to increase working capital reserves, allowing producers to buy raw fish without taking predatory loans.
Women's Empowerment: A specific focus was placed on training women, who constitute the majority of the processing workforce. By formalizing their skills and giving them roles in the cooperatives, the project aimed to elevate their status from invisible laborers to recognized entrepreneurs.
Figure 3: UNDP Accelerator Lab’s holistic approach targets every node of the value chain, from the drying rack to the bank account.
6. Benefits and Impact: The Dividends of Modernization
The transition to "Safe Dry Fish" production has generated measurable positive outcomes for the producers of Nazirar Tek, validating the intervention model.
Figure 4: A happy beneficiary standing in front of his shutki processing place (khola), where dry fish is being dried.
6.1 Economic ROI: The Premium of Safety
The most compelling benefit has been financial. Safe, chemical-free dried fish commands a significantly higher market price.
Price Realization: Producers report that while traditional, chemically treated fish sold for 250–300 BDT/kg (USD 2-2.5), the new safe product fetches 800–1,200 BDT/kg (USD 6.5-10).
Demand Stability: The "Safe" branding has tapped into a latent demand among urban middle-class consumers who were previously wary of dried fish due to health scares. Producers note that demand now outstrips supply, with products often sold out in advance.
6.2 Restoring Consumer Trust
Successful rebranding and improved product cleanliness have restored consumer trust, overcoming the previous stigma of toxicity. This is vital for the sector's long-term health, with producers confidently stating the dry fish is now completely organic.
6.3 Social and Health Impacts
Healthier Workplace: The reduction in pesticide use has direct health benefits for the workers, who are no longer exposed to toxic fumes and residues during their daily labor.
Reduced Migration: The increased profitability of the local business has provided a viable alternative to dangerous and expensive overseas migration. Young men in the community are increasingly choosing to invest in the family business rather than paying agents to go to Malaysia or the Middle East.
Figure 5: Feedback Focus Group Discussion (FGD) with dry fish producers in Nazirar Tek, Cox’s Bazar, capturing community perspectives on production practices, challenges, and opportunities for improvement.
7. Future Outlook: Towards a Sustainable Blue Economy
The horizon for Nazirar Tek is defined by a massive state-led transformation project that promises to reshape the entire landscape of the industry.
7.1 The Khurushkul Ashrayan Project: Industrialization or Displacement?
The Government of Bangladesh has initiated the Khurushkul Ashrayan Project, a mega-housing and rehabilitation scheme for the climate refugees of Cox’s Bazar. A central component of this project is the creation of a Modern Dry Fish Processing Zone.
The Vision: This zone aims to replace the informal kholas with a formal industrial park equipped with mechanical dryers, cold storage, packaging factories, and waste treatment plants (ETP).
The Promise: It promises to standardize production, ensure hygiene compliance for export to the EU and US markets, and provide secure tenure to the producers.
The Challenge: The transition from the open sands of Nazirar Tek to a structured industrial zone raises concerns about access. Will small-scale producers be able to afford the overheads of the new zone? Will the traditional sun-drying method, which imparts the specific flavor profile consumers love, be lost to mechanical drying?
7.2 Blue Tourism and Digital Markets
Future growth strategies focus on integrating the sector into the broader tourism economy of Cox’s Bazar.
Culinary Tourism: Transforming the drying yards into hygienic, visitable sites where tourists can witness the process and buy fresh products. This "farm-to-fork" (or "sea-to-bag") model captures the maximum value for the producer.
E-Commerce: Expanding the digital footprint. While Facebook sales have started, a dedicated e-commerce platform for "Cox’s Bazar Safe Shutki" could aggregate supply from small producers and handle logistics for nationwide delivery, breaking the dependency on the Asadganj syndicate permanently.
7.3 Export Potential
With the "Safe" certification, the export potential is vast. The Bangladeshi diaspora in the UK, USA, and the Middle East represents a high-value market. However, accessing these markets requires rigorous compliance with phytosanitary standards (HACCP), which the new industrial zone in Khurushkul aims to facilitate.
8. AI and Data-Driven Strategies for Blue Gold 2.0
Data-Driven Recommendations:
AI-Enabled Predictive Modeling: Implement low-cost sensors at kholas to collect real-time environmental data (temp, humidity, wind). AI will develop predictive spoilage models to inform drying/storage decisions, reducing reliance on weather and eliminating the need for chemical "insurance."
Dynamic Market Intelligence: Create a centralized, public digital dashboard with daily data on fish landings, consumption trends, and market prices. This empowers producers for collective, informed bargaining, shifting them from price takers controlled by syndicates.
Digital Traceability (QR Codes): Introduce standardized QR codes on "Safe Dry Fish" packaging, linked to an immutable record (blockchain) verifying source, processing method (e.g., solar dryer), and "Safe" certification. This formalizes consumer trust, mitigates toxicity stigma, and provides the necessary phytosanitary audit trail for export (EU/US).
Blue Tourism Integration: Develop a geo-tagged digital platform/app mapping verified, hygienic kholas. This integrates the industry with Cox’s Bazar tourism for culinary tourism bookings and serves as a Direct-to-Consumer (D2C) sales channel, maximizing producer value by bypassing middlemen.
9. Conclusion
The dry fish industry in Nazirar Tek reflects Bangladesh's development: a story of resilient, climate-displaced communities building an industry, yet struggling with exploitation, environmental risk, and poor infrastructure, especially for informal and marginalized workers.
Interventions by UNDP Accelerator Lab, government, and Uttaran are pivotal. By introducing safer, organic production technologies, better practices, and capital access, they've modernized the traditional industry without losing its cultural or ecological roots, fundamentally improving public health, product quality, and livelihoods.
Uttaran's community engagement ensured adoption and trust, moving producers toward safer, more dignified, and viable livelihoods.
As Nazirar Tek faces the Khurushkul Ashrayan Project, inclusive modernization is key. The Blue Economy must benefit small entrepreneurs, women, and cyclone-affected families, not just large exporters. The "Shutki Palli" revolution's success hinges on balancing profit with people, and heritage with hygiene.
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