Marketing of rubber by the state-owned rubber producer, Bangladesh Forest Industries Development Corporation (BFIDC), has for long been fraught with lack of imagination. This largely explains why the drive to feed local industries engaged in producing rubber products is far from adequate. The result, as reported by the media, tells a pathetic state of this prospective sector. The concerned quarters put the blame on the stereotyped methods, typical of the management of state-owned enterprises (SOEs) in the country.
It is extremely disheartening to note that the BFIDC has not been able to sell rubber to local manufacturers of rubber products for the last one year or so. A local daily reports that BFIDC is now stuck with a stockpile of around 5,000 tonnes of rubber, worth more than Tk 1.25 billion. Local consumers, who were the target buyers of rubber of the state enterprise, have stopped buying from it, and are, instead, importing to meet their demands. This reportedly is due to the Corporation's lack of mandate to sell at prices below the one set by it (the government) and not at auction prices that tend to be lower.
Non-acceptance of the bid price by the BFIDC has burdened the corporation, on the one hand, with unsold stocks and pushed the local consumers to importing and facing transportation hassles, on the other, amid the prevailing tumultuous situation. Since selling through auctions is the practice followed by the BFIDC, it is indeed difficult to reason out why the management is sticking to prices set by it. However, one might smell a rat in case of auctions being orchestrated by unholy syndicated arrangement among the bidders. But the fact remains that if the price is prefixed, it has to take the international prices into account. Fixing the price, disregarding international prices often at higher levels, will do no good to sell the product. Reports say, in a bid held in January, 2013, bidders offered Tk 251 for a kilogram of rubber, but the price set by the Corporation was Tk 265. In another bid the same year, bidders offered Tk 245 as against Tk 260 set by the Corporation. In addition to the price, bidders are required to pay around 24 per cent value added tax and other taxes.
Currently, the BFIDC is reportedly in possession of approximately 45,000 acres of land allotted to it for rubber cultivation. The annual production is estimated at 10,000 tonnes, accounting for 65 per cent of the total domestic production. The rest is produced by private players whose plantation area covers around 33,000 acres. Failing to dispose of stocks for local consumption is seen by many as a serious drawback impeding the growth of the rubber sector in producing both raw materials as well as processed and finished products. It is sheer incompetence on the part of the state agency to stockpile rubber for no meaningful purpose and force local consumers to meet their requirements through import -that too at a cheaper price. If an organisation like the BFIDC is meant to feed local consumption as well as make profit, it has to address the issues in a professional manner.
Stockpiling of rubber by BFIDC
FE Team | Published: January 11, 2014 00:00:00 | Updated: November 30, 2026 06:01:00
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