Bangladesh’s state-run sugar mills have suffered an annual loss of more than Tk 500 crore for the fifth consecutive year, despite repeated cost-cutting measures and the closure of six major loss-making mills five years ago, reports The Daily Star.
According to the latest financial report from the Bangladesh Sugar and Food Industries Corporation (BSFIC), the net loss in the 2023–24 fiscal year stood at Tk 508.24 crore. This is slightly less than the Tk 556.34 crore loss in the previous year.
Losses had peaked at Tk 1,036 crore in 2020–21, the first year after the government shut mills in Pabna, Shyampur, Panchagarh, Setabganj, Rangpur, and Kushtia in December 2020 in a bid to modernise the sector.
However, the industry continues to struggle due to outdated machinery, excessive staffing, and low-yield sugarcane. Globally, sugar recovery rates — the amount of sugar extracted from sugarcane — average 10% to 12%. Bangladesh’s mills achieve only 5.5% to 6%.
The BSFIC says production costs are Tk 260 per kilogram, but sugar sells for Tk 125, meaning a loss of Tk 135 on every kilogram. Private competitors sell sugar for Tk 110 to Tk 115, further reducing demand for BSFIC’s product. The corporation maintains its sugar is naturally processed and higher in quality, but this has not stopped unsold stock from piling up.
In 2023–24, BSFIC produced 46,197 tonnes of sugar. As of August 2025, nearly 35,000 tonnes remain in storage. With national demand at around 22 lakh tonnes a year, the state-run mills’ share is negligible.
To clear stocks, BSFIC has proposed supplying sugar through government food distribution programmes. “If state agencies bought even half our stock, they’d get good-quality sugar and we could reduce losses,” a BSFIC official said.
Among the nine operational mills, Rajshahi Sugar Mills posted one of the largest losses at Tk 66 crore. North Bengal Sugar Mills reduced its losses from Tk 113 crore in 2020–21 to Tk 38 crore in 2023–24. Mobarokganj Sugar Mills, however, saw losses climb to Tk 70 crore after earlier improvements.
Only Carew & Company made a profit — Tk 85 crore in 2023–24, up 32% from the previous year — but that came entirely from its distillery unit. Its sugar business lost more than Tk 60 crore.
BSFIC’s planning and development chief, Md Saifullah, credited some reduction in deficits to scaled-back operations, fewer workers, and lower global sugar prices. Still, he admitted deeper issues. “We’re running old machines with low-quality crops and expecting profits. That’s not realistic,” he said.
The industry supports rural livelihoods, with 60,000–70,000 acres of sugarcane grown each year, benefiting thousands of farmers. The crop also helps reduce flood risks due to its tolerance to waterlogging.
Economist Khandaker Golam Moazzem of the Centre for Policy Dialogue has urged urgent restructuring, calling for the closure of all loss-making mills while keeping Carew & Company operational. He also proposed an international audit of BSFIC’s assets and the sale of unused property for industrial use. “This land could attract investment and diversify the economy,” he said.
Saifullah agreed that only a long-term, coordinated plan could save the sector. A senior industries ministry official, speaking anonymously, said the government has considered closing or leasing failing mills to private operators, but political and labour opposition has delayed action. With elections approaching, major reforms are unlikely.
Meanwhile, the interim government is revisiting a stalled 2019 plan to modernise six closed mills through partnerships with UAE-based Sharkara International, Thailand’s Sutech Engineering, and Japan’s Marubeni Protechs. The move follows the collapse of a controversial 2023 deal with S Alam Group after political turmoil.
A meeting on June 26 at the Chief Adviser’s Office decided to review a feasibility study prepared by BSFIC and Sutech Engineering before proceeding.
