With a massive stock of unsold sugar worth Tk16.5 crore lying idle in the warehouse, the Rangpur Sugar Mills Limited is going to start crushing sugarcane again.
Factory sources said the crushing was likely to begin on December 6.
In 2011-12 and 2012-13 fiscal years, RSML produced 32.67bn tonnes of sugar but the mill authority could not sell the produce because production cost was higher than market prices, a factory insider said.
In the last one year, not even a single kilogram of sugar had been sold, the source added.
Mill authorities set prices of sugar at Tk50 per kg and signed agreement with 15 local dealers. But the dealers did not buy a single kilogram of sugar because of soaring prices, an official of RSML told the Dhaka Tribune.
As a result, 32.67bn tonnes of sugar worth TK16.5 crore remained unsold, resulting in financial worries to the local sugarcane growers as well the mill. Consequently, the mill management has been having troubles in paying wages and borrowing from the head office.
“I am not interested in buying sugar at Tk50 per kg as I can buy it Tk44 from the exporters,” said a dealer preferring not be named.
He also said: “If I buy sugar at the price set out in the agreement, I will have to suffer huge losses as the market price is lower than that set by the mill.”
Currently, a one kg packs of Fresh and Teer sugar are being sold at TK 44/45 in the local market.
“If the mill authorities fail to pay their dues in time, farmers may lose interest in sugarcane in the next season,” said M Zinnat Ali Prodhan, a farmer from Gaibandha.
He urged the mill management to pay farmers’ dues as soon as possible, otherwise it could have negative impact on production.
Abdul Khaleque, managing director of RSML, admitted that there was stocked sugar worth over 16 crore. “It would be very difficult for us to store new production set to start next week, if we cannot vacant the store quickly.”
Stocked sugar had already started melting which would degrade the quality and might result in huge financial losses for the company, he added.
The factory management should sell out the stored sugar, by lowering prices if needed, before going into further production, said Abul Khayer Mursalin Parvez, president of Gaibandha Chamber of Commerce and Industry.