Sugar turns sour for BSFIC
Stock worth Tk 631.20 cr lying unsold23 August 2014 Kazi Zahidul Hasan
About 157,800 tons of unsold sugar valued worth Tk 631.20 crore is lying in the godowns of Bangladesh Sugar and Food Industries Corporation (BSFIC) leading it to huge financial hardship, sources said.
Admitting the matter a senior BSFIC official told The New Nation on Friday that the Corporation is now facing huge financial difficulty having a massive stock of unsold sugar.
He said, the authorities of BSFIC earlier lowered its sugar price to offload stocks but the move did not yield any positive result due to
prevailing market conditions.
"We are unable to release our stocks because the private sector's millers are offering more discount than us resulting poor demands for public mills produced sugar," he added.
He pointed that the Corporation is facing uneven competition with the private millers because of its high cost of production. "The private millers have successfully maintained a lower production cost with infusing dynamism in their production base installing state-of-art technology," he added.
Recently, high government officials at a meeting with the private sugar refiners asked them to keep prices of their produce higher than that of the public sector sugar mills for releasing the stocks of BSFIC. "This move also turned futile because the private millers later failed to honour the government's request," he added.
The official further said, if the stock could not be released immediately, it would degrade the quality of the sweetened resulting huge financial losses for the Corporation. "The authorities should sell out the stored sugar by further lowering their prices before going into further production," he suggested.
The Corporation is going to start a new crushing season of sugarcane at 15 state-owned mills from October, this year. "Already burdened by the unsold sugar, the cash strapped state entity (BSFIC) this time would face immense trouble in paying the sugarcane farmers in the upcoming season," he said.
When asked, Chairman of BSFIC Mahmudul Huq Bhuiyan, said, "I am not worried about the sugar stock because it has been made in line of the government strategy."
He explained that the commodity has been kept stocked in the godowns of the Corporation with a view to intervening the market in case of any crisis. "Once the government failed to store adequate sugar in its godowns, the private millers might take the advantage. They will raise market prices of the sweetener to make brisk profit," he added.
Last season, all the 15 public mills produced 28,268 tons of sugar crushing 181,8862 tons sugarcane. All the quantity of sugar produced last season remained unsold and there was also overlapping unsold stock of 29,532 tons produced in the previous season.