State sugar agency has little to sell though prices rocket
With sugar prices making new records almost every day for a supply crunch at home and abroad, pushing up the cost of making sweetener-based foods, state-run Bangladesh Sugar and Food Industries Corporation (BSFIC) can't increase the supply to provide some relief to consumers.
Depleting stocks owing to a very low production is largely responsible for the current weak state of the government agency.
Mills under the state-owned producer made around 24,500 tonnes of sugar in the last fiscal year of 2021-22, the lowest in 14 years, just half of 48,000 tonnes they delivered the previous fiscal year and less than a third of 82,000 tonnes in 2019-20.
At present, the BSFIC has 2,350 tonnes of the widely-used food item in stock, which will be released early next month ahead of the beginning of sugarcane crushing season, according to officials.
The corporation suspended selling sugar in the market through its dealers on October 13 owing to the lower stock.
"We are helpless at this moment as we have a very nominal quantity of sugar in stock," said Md Arifur Rahman Apu, chairman of BSFIC.
"Besides, we have no funds to import sugar to mitigate the crisis," he said, replying to a query about whether the BSFIC has any plans to bring in the item from external sources to meet demand.
Consumers in Bangladesh saw the price of the sweetener surge over the past two weeks as refiners blamed the production dip resulting from a very low supply of gas needed to refine raw sugar.
Sugar price was 29 per cent higher at Tk 110 to Tk 115 per kilogramme yesterday from Tk 84 to Tk 90 a month ago, data from the Trading Corporation of Bangladesh showed, driven by higher prices in the global markets.
Retailers in some markets, however, asked Tk 120 for a kg of sugar.
Before suspending the sales, the corporation used to sell sugar at Tk 75 per kg to dealers against its production cost of around Tk 250. It distributed the item through 2,500 active dealers across the country and each dealer got only 500 kg per year.
Ghulam Rahman, chairman of the Consumers Association of Bangladesh, said: "The BSFIC should release the sugar from its stock to stabilise the market."
He urged the government to withdraw the supplementary duty on sugar import in a bid to bring down the price of the sweetener.
"Besides, the government needs to take immediate initiatives to maintain a smooth supply chain," Rahman added.
The BSFIC's production has dipped since December 2, 2020, when the government shut production at six mills in the face of consistent losses. The industries ministry, which operates the BSFIC, said it would resume production in the mills through modernisation.
Until now, there is no visible progress regarding the modernisation and reopening of the mills.
The BSFIC is a loss-making state-owned enterprise.
It suffered Tk 880 crore in provisional losses in 2021-22, albeit down 15 per cent from Tk 1,036 crore the previous year, according to the Bangladesh Economic Review 2022.
About 98 per cent of Bangladesh's annual demand for sugar of 25 lakh tonnes is met through imports.
Globally, sugar prices rose to record levels owing to extreme weather and a surge in energy costs.