National sugar agency has little to sell despite soaring prices

As sugar prices hit new highs almost every day due to supply shortages at home and abroad, driving up the cost of making foods with sweeteners, l State-owned Bangladesh Sugar and Food Industries Corporation (BSFIC) cannot increase supply to provide some relief to consumers.

The depletion of stocks due to very low production is largely responsible for the current weakness of the government agency.

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The state-owned producer’s mills made around 24,500 tonnes of sugar in the last fiscal year 2021-22, the lowest in 14 years, only half of the 48,000 tonnes they delivered the previous fiscal year and less than a third of the 82,000 tons in 2019 -20.

Currently, the BSFIC has 2,350 tonnes of the widely used feed in stock, which will be released early next month before the start of the cane crushing season, officials said.

The company suspended the sale of sugar in the market through its dealers on October 13 due to low inventories.

“We are helpless at the moment as we have a very nominal amount of sugar in stock,” said Md Arifur Rahman Apu, Chairman of BSFIC.

“Also, we have no funds to import sugar to alleviate the crisis,” he said, responding to a question about whether the BSFIC was considering importing the article from external sources to meet demand.

Consumers in Bangladesh have seen the price of the sweetener rise over the past two weeks, with refiners blaming the drop in production resulting from a very low supply of gas needed to refine raw sugar.

The price of sugar was 29% higher, from 84 to 90 taka last month to 110 to 115 taka per kilogram a month ago, according to data from the Trading Corporation of Bangladesh, due to higher prices. prices on world markets.

However, retailers in some markets were asking Tk 120 for one kg of sugar.

Before suspending sales, the company used to sell sugar at Tk75 per kg to resellers against a production cost of around Tk250. It distributed the item through 2,500 active dealers across the country and each dealer received only 500 kg per year.

Ghulam Rahman, Chairman of the Bangladesh Consumers Association, said, “BSFIC should release sugar from its stock to stabilize the market.”

He urged the government to remove the additional duty on sugar imports in a bid to bring down the price of the sweetener.

“Furthermore, the government must take immediate initiatives to maintain a smooth supply chain,” Rahman added.

BSFIC production has fallen since December 2, 2020, when the government halted production at six factories in the face of continuing losses. The Department of Industry, which runs the BSFIC, said it would resume production at factories through upgrading.

So far, there is no visible progress regarding the modernization and reopening of the mills.

BSFIC is a loss-making public enterprise.

It suffered interim losses of Tk 880 crore in 2021-22, although down 15% from the previous year’s Tk 1,036 crore, according to the Bangladesh Economic Review 2022.

About 98% of Bangladesh’s annual sugar demand of 25 lakh tonnes is met by imports.

Globally, sugar prices hit record highs due to extreme weather conditions and soaring energy costs.

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