The New Nation - Internet Edition

Staff Reporter

The country's 15 sugar mills under Bangladesh Sugar and Food Industries Corporation (BSFIC) incurred a provisional loss of taka 157 crore during the fiscal 07 but a year ago earned a profit of taka 63.21 crore, according to Bangladesh Economic Review 2007. Another source says that over one lakh metric tonne of sugar has been lying unsold in different mills in consequence whereof the sugarcane producers could not get their dues from the authorities. If the non-payment of dues of the producers continues for few more years, they may lose interest in sugarcane production.

Certain quarters blame the government's apathy to protect the interests of the producers as well as of the mills. The production cost of one-kilo sugar being taka 36 only, the sale price is supposed to be around taka 40 only. As the annual production capacity of the 15 mills is around 2.10 lakh metric tonnes, the country has to import the remainder of the annual demand of 12 to 14 lakh metric tonnes. And the importers find it easy to import from India paying taka 5000 per tonne as duty. In this backdrop, a proposal was submitted to the government to enhance the import duty to taka 10,000 but the government has not yet taken the matter seriously.

And to boost the sugar export to Bangladesh and Nepal, the Indian government pays a subsidy of $ 65 per tonne to keep the price low in these two countries (subsidy to agricultural output is universal in the world. Unfortunately the WB and the ADB advise the Bangladesh government to cut the size of subsidy if not at all slashed). This is this reason that the price of the Indian sugar in Bangladesh is taka 28 to 30 per kilo, which has compelled the mill authorities to sell sugar below their production cost by taka five. Consequently, the corporation has incurred losses during the last fiscal.

For non-payment of their dues for months together, the sugarcane producers may lose interest in production, which might make the country totally dependable on import. In that situation, the cost of the imported sugar will surely be much higher than the present level to be borne by the sugar consumers meaning further rise of costs of living.

It, thus, implies upon the government to increase the import duty by taka 5000 and to give loan to the mills authorities to clear the dues of the sugar cane farmers at the earliest. Meanwhile, the government has set the production target at 1.74 lakh metric tonne for the season November-March 08.