The financial stability of eight state-owned sugar mills is in serious difficulty as the Bangladesh Sugar and Food Industries Corporation (BSFIC) falls short of the money needed to pay sugarcane farmers. The corporation, despite having outstanding government claims of Tk 80.80 billion for trade gaps and subsidies, still lacks Tk 3.30 billion required to clear farmers’ payments, reports The Financial Express.
According to officials, the corporation’s long-standing financial troubles have pushed the mills into deeper distress. BSFIC, operating under the Ministry of Industries, has already asked the Ministry of Finance to approve and release the remaining funds needed to settle dues, highlighting an urgent shortfall in meeting its commitments.
This season, BSFIC plans to crush 0.76 million tonnes of sugarcane across eight of its nine active mills, excluding Keru & Co. (BD) Ltd. Farmers must be paid Tk 4.80 billion for this cane. So far, the finance ministry has released Tk 1.5 billion, Tk 1.0 billion on September 25 and Tk 500 million on November 25, which covers only 31.27% of the total requirement. An additional Tk 3.30 billion is still urgently needed.
An official said the shortage has put the corporation under severe financial pressure. If the remaining funds are not released on time, farmers may become frustrated and reduce future sugarcane supply, which would create further setbacks for the already struggling state-run mills.
The industries ministry has launched several projects to diversify sugar-based products and make the mills more profitable. Some of these initiatives are already in progress, an official confirmed.
BSFIC has also drawn up a five-year roadmap (FY 2022-23 to 2026-27) aimed at turning the sugar sector profitable. A source said loans taken by the mills were originally intended to support sugarcane farmers. Although farmers cleared their dues by supplying cane, the mills were unable to repay these loans, adding to the financial pressure, as per the news report.
