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Tk 12,000 crore at stake

Cold storages operators seek loan rescheduling facility

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Kazi Zahidul Hasan :
Cold storage operators have sought a long-term loan rescheduling facility from the government, saying they are incurring huge losses for the slump in potato prices.
Bangladesh Cold Storage Association (BCSA) came up with the appeal in a letter to the Finance Ministry on Sunday.
The association also forwarded copies of the letter to the Bangladesh Bank (BB) and Bank and Financial Institutions Division (BFID) under the Finance Ministry.
 "A steep fall in potato prices due to overproduction this year left the cold storage operators with huge unsold stocks causing the losses," Dr Kamrul Hossain Chowdhury, first Vice-President of BCSA told The New Nation yesterday.
Farmers have produced about one crore tonnes of potato against the demand 85 lakh tonnes this year hitting the unsold stock of 15 lakh tonnes this year.
Potato growers and cold-storage owners have to incur losses worth around Tk. 12,515 crore due to the unsold stock of potato and low prices, according to an estimation of the BCSA.
Farmers have spent Tk 14 for a kg of potato as production cost, but now potato is being sold at Tk. 2-3 per kg at the gates of cold storages due to drastic collapse of prices.
However, the retail potato prices remain high in Dhaka which ranging between Tk 15- Tk 20 for a kilogram.
 "The loss of farmers will stand at Tk 6,137 crore due to unsold stock and slump in potato prices, while the loss of cold-storage owners will stand at Tk 6,378 crore," Dr Kamrul Hossain Chowdhury.
Out of the losses, the farmers will incur a loss of Tk. 2,812 crore due to unsold stocks and Tk 3,325 crore for selling potatoes at low prices.
Chowdhury said the farmers have invested Tk 1,500 per sack (85 kg) of potato for preservation in cold storage, which is now selling for Tk 700. It has forced the cold-storage  
owners to reduce fixed rent to Tk 250 from Tk 400 per sack causing huge losses for them.
There are about 416 cold storages across the country and farmers stored 53 lakh tonnes of potato this year. Of them, 31 lakh tonnes have already been sold with huge loses.
 "Potato prices have hit record low this year making cold storage operators financially crippled. Our survival now at a stake…we can only survive if the government extend the loan rescheduling facility to us," said Chowdhury.
Referring to the letter, he said that the Association has sought 20 years for paying back their outstanding loans availing the loan rescheduling facility.
 "The government has been requested to transfer all the outstanding project and CC (cash credit) loans of the cold storage owners to a block account for a one-year moratorium period (from December 31, 2017) and fix the loan repayment period for 20 years with differential instatement without down payment while rescheduling of the outstanding loans of the cold storage operators," he added.
The loan repayment period would be counted from December 31, 2019.
 "We also proposed the government to fix a 5.0 per cent interest for setting up cold storages and the outstanding loans which would be transferred to the block account would get the interest waiver," he added.

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