Seven local refiners have sought a raise in the retail price of sugar in view of higher import cost of their raw materials because of soaring exchange rate and the global market volatility. The government earlier fixed the maximum retail price of sugar at Tk 130-135 per kg. But the retailers are selling it at prices much higher than the official rates. Last week the retail prices ranged from Tk 150 to Tk 160 a kg.
In the international market, the raw sugar is priced at its 40-year high of 680-690 US dollars per tonne. On the other hand, in the wake of appreciation of the greenback, the importers now need to open their letters of credit (LCs) with each dollar costing Tk 121-123. So, the import cost is estimated to rise to a high of Tk 145 as claimed by the refiners. In such a situation, it is quite natural that the refiners will clamour for adjustment of the official rates of sugar at the retail level in view of the present market situation.
Bangladesh now depends heavily on imports to meet the local demand for sugar which is estimated at 2.4-2.5 million (24-25 lakh) tonnes annually. The country produced nearly 22,000 tonnes in the last fiscal year. In the current fiscal year the state-run sugar mills under Bangladesh Sugar and Food Industries Corporation (BSFIC) have set a target to produce 33,000 tonnes. That is far from enough to meet the local demand, though the BSFIC sells the sweetener at a much cheaper rate of Tk 125 per kg. If the BSFIC's production could be raised significantly, it might have a positive impact on the local market. The prices could be kept at a tolerable level and a substantial amount of foreign currencies could be saved. Such a step if taken would go a long way in addressing the existing twin problem of runaway food inflation and the dollar crunch. In addition, the farmers would be greatly benefited.
Unfortunately, six of the 15 state-run mills under BSFIC were closed back in 2020 as they were incurring losses because of the low supply of sugarcane. Even thirty or forty years back, it was a different story. Sugarcane and jute were grown abundantly in every corner of the country. They were deemed to be the cash crops for farmers during their lean season of the year. But soon after, the two crops lost their lustre. Were the authorities sincere enough in understanding the reasons that forced farmers to switch over to other crops?
Floods and droughts are common phenomena in Bangladesh. Sugarcane can withstand both of these natural adversities unlike other crops. We should leave no stone unturned to bring back the lost glory of sugarcane.
Of late, Bangladesh Sugarcrop Research Institute (BSRI) has developed a high-yielding variety of sugarcane, which reportedly fetches a good amount of profit for the farmers. The farmers should be made aware of the benefit of this high-yielding variety. If they find it profitable, they will come back to sugarcane cultivation as before. We should not let this chance of import substitution slip by.