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Sugarcane Pricing and Its Impact on Cane Supply and Sugar Production in Natore Sugar Mills Area

M.M Alam
Bangladesh Sugarcane Research Institute, Ishurdi, Pabna, Bangladesh.

S.A. Sabur
Professor
Dept. of Agricultural Marketing and Cooperation, BAU, Mymensingh.

S.M. Fakrullslam
Assistant Professor
Dept. of Agricultural Economics, IPSA, Gazipur.

M.M. Alam
Scientific Officer (Ag. Econ), FSRDP
Bangladesh Sugarcane Research Institute, Ishurdi, Pabna.

Abstract/ Executive Summary:

This study endeavoured to analyze pricing system of sugarcane and its impact on cane supply and sugar production was carried out in Natore Sugar Mills zone in 1997. The findings of the study reveal that gur maker purchased cane from the farmers during the period 1994-95 to 1996-97 at the rate of Tk. 1018.4 to 1206 per ton instead of Tk. 1005 per ton as fixed up by the Government. The change in total production of sugarcane in the study area is mainly due to change in prices of sugarcane fixed by the Government. Sugarcane supply to the mills in response to changes in price and determination of an effective price of sugarcane indicates that the price of sugarcane should be increased by Tk. 52.08 per ton in the mills gate, if the cane supply is not sufficient for milling due to lower cane price. Supply ratio response of cane to sugar mills for price ratio of gur to sugar indicates that price of gur restrain the supply of cane to the sugar mills. The farmers decision as how much cane will be supplied to the mills and production of sugar depends primarily on the price of cane fixed by the Government as well as price offered by the gur maker.

Keywords: Sugarcane pricing, Cane supply, Sugar production, Gur, Gur maker.

Location: Natore Sugar Mills zone

Start Date: 00-00-1994

End Date: 00-00-1997

Program Area: Socio-economic and Policy

Commodity: Sugarcane

Objectives:

To analyze pricing system of sugarcane and to find out impact of sugarcane price on sugarcane supply to the mills and finally sugar production at Natore sugar mills zone.

Methodology:

The study was based on collection of secondary data from Natore Sugar Mills zone, Natore which is one of the latest and matured sugar mills. Secondary data were collected from 13 production seasons (1984-85 to 1996-97) of Natore sugar mills zone. The secondary data viz. i) sugarcane area in hectares, ii) sugarcane production iii) sugarcane supply to the mills iv) diversion of cane for gur making v) sugarcane procurement price of the mills vi) sugarcane price paid by gur makers vii) sugar production quantity by the mills viii) sugar and gur prices in the market were collected from the respective sugar mills and Bangladesh Sugar and Food Industries Corporation (BSFIC), BBS, District Marketing Office, Natore; Directorate of Agricultural Marketing, MOA, Government of Bangladesh for the period of 1984-85 to 1995-96 production seasons of sugarcane. Data were analyzed with the purpose of achieving the objectives of the study.

Source of Information: Bangladesh Journal of Sugarcane, Vol: 23, pp: 40-50, July, 2001, ISSN 1991-8925

Article Link (Online Journal):

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

The findings of the study reveal that gur maker purchased cane from the farmers during the period 1994-95 to 1996-97 at the rate of Tk. 1018.4 to 1206 per ton instead of Tk. 1005 per ton as fixed up by the Government. The change in total production of sugarcane in the study area is mainly due to change in prices of sugarcane fixed by the Government. Sugarcane supply to the mills in response to changes in price and determination of an effective price of sugarcane indicates that the price of sugarcane should be increased by Tk. 52.08 per ton in the mills gate, if the cane supply is not sufficient for milling due to lower cane price. Supply ratio response of cane to sugar mills for price ratio of gur to sugar indicates that price of gur restrain the supply of cane to the sugar mills. The farmers decision as how much cane will be supplied to the mills and production of sugar depends primarily on the price of cane fixed by the Government as well as price offered by the gur maker. Therefore, determination of an effective prices of sugarcane and sugar, formation of national price policy and reflection of such policies in the market are urgently needed for orderly improvement of sugarcane, its supply and eventually the sugar production.

Knowledge Management: Journal