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Move on to import raw sugar for first time

Five mills to whiten 15,000T

Rezaul Karim | January 13, 2019 00:00:00

The government has made a move to import raw sugar to boost its stock, for the first time, to address huge shortages of the sweetener, officials said.

Abul Rafique, chief of personnel and secretary of Bangladesh Sugar and Food Industries Corporation, said, "A project is underway to whiten imported raw sugar to meet the growing local demand."

"We've done a feasibility study and prepared a draft development project proposal (DPP) which is already in industries ministry for approval," he added. Mr Rafique said the DPP will be submitted to planning commission after the ministry's approval.

The Executive Committee of the National Economic Council approved the project last year, he stated.

The government will import an estimated 15,000 tonnes of unrefined sugar annually. The imported sugar will be whitened at five state-run sugar mills, Mr Rafique mentioned.

This is for the first time the government is going to whiten imported raw sugar in the country.

It is expected to start marketing white sugar in the domestic market by the current calendar year.

"Sugar production costs by state-run mills are higher than sales prices. The mills are, therefore, incurring heavy losses," an official said. Also, the mills cannot produce sugar at an expected level despite having the capacity for lack of basic raw materials, he added.

The ministry concerned has undertaken multiple projects to diversify sugar products by tapping potential to make the mills profitable. Some projects are currently being implemented, the official said.

Local mills produce sweat substance from sugarcane supplied by their contract growers and farmers.

According to a source, nearly 67 per cent out of the mills' total operational costs is used for sugar production.

Some 20-24 per cent is spent on the payment of bank interest and charges, he disclosed.

Available data shows the corporation's trade deficit stood at Tk 4.89 billion in fiscal year 2010-12.The losses incurred by state sugar mills are gradually increasing as they are not adjusting production costs.

On the other hand, the cash-strapped mills are still struggling to meet regular expenses, a source said. The annual local demand for refined sugar is 1.6 million tonnes, the bulk of which comes through import.

On average, 0.11 million (1.1 lakh) tonnes of sugar are required per month, according to the official data.

An importer said 1.4-1.5 million tonnes of crude sugar are imported a year, which are supplied to the market after refining. There are 15 sugar mills running under the state entity across the country.

Sources said some 68562.50 tonnes of sugar were produced in FY 2017-18. It was 59984.55 tonnes in FY 2016-17.

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