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Bangladesh - March 31, 2022

Historic lowest sugar production in govt mills

Zarif Mahmud: A decade ago (FY 2012-13), the annual production of state-owned sugar mills in the country was over one lakh tonnes. In the last sugarcane threshing season (2020-21 fiscal year) that production has come down to 48,133 tons. In the current financial year (2021-22), the total production has been 24,900 tons, which is the lowest in the history of the country in terms of production in government mills.
According to the data of Bangladesh Sugar and Food Industries Corporation, the production of sugar mills in the country was more than one lakh tons even in the financial year 2013-14. In that financial year 1 lakh 26 thousand tons of sugar was produced. Then the fall begins. In one fell swoop next year (2014-15 fiscal year) in the name of production 6,450 tons. In the next two years production declined further. Then the next two years lead again. In the 2019-20 financial year, the production stood at 72,140 tons. Then again, at least this year, which has come to a standstill.
Enayet Hossain, director (production and engineering) of Bangladesh Sugar and Food Industries Corporation (BSFIC), the regulator of sugar mills, told that sugar production has declined mainly due to lack of raw materials. In addition, the current sugar mills are very old, the depreciation is very high. Even if there is a will, more production is not possible.
‘Another reason for the big push in production is the closure of six sugar mills in 2020. At that time BSFIC decided to close these sugar mills to reduce the burden of losses. At that time, six out of 15 sugar mills were closed, he added.
Even then, the nine sugar mills launched last season failed to produce at their capacity. Due to the scarcity of sugarcane produced on their own land and from the closed sugar mills, the sugar mills in production were in operation for three to five months. One or two matches did not last even a month.
Meanwhile, it is learned that the situation is worse in the current financial year. Sugarcane production in Kushtia, Pabna, Panchagarh, Shampur (Rangpur), Rangpur and Setabganj (Dinajpur) has come down due to closure of sugar mills. Besides, BSFIC has not provided fertilizers and seeds to the farmers in the ongoing mill area due to financial crisis. Due to this the raw material crisis will be more pronounced this season, so there is a fear of further reduction in production.
According to BSFIC, out of 15 sugar mills in the country, three were established in the thirties, three in the fifties, seven in the sixties and two after the independence of Bangladesh. Most of the sugar mill parts are old and worn out. As a result, the production capacity during installation has come down to the bottom. The economic life of 10 out of 15 sugar mills has already come to an end.
BSFIC says they were maintained through proper repair, maintenance and BMRI (Balancing Modernization Renovation and Expansion). But the cost of sugar production is several times higher than the market price. That is why the last six mills have been closed. The higher the sugar production, the heavier the losses of BSFIC. As a result, most of the corporation’s policy makers are not in favor of increasing sugar production until alternative measures are taken.

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