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Economics of Sugar Industries Performance in Bangladesh

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

M. I. Haque
Bangladesh Sugarcane Research Institute, Ishurdi, Pabna, Bangladesh.

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

Abstract/ Executive Summary:

In Bangladesh as a developing and labour intensive country, the performance of sugar industry in the sphere of socioeconomic condition connotes special significance. More than 0.6 million farm-families are dependent on this sector for their subsistence. The economy mainly of northern region, of the country largely depends on sugar industry. Every year the sugar industry is incurring a huge amount of losses for which the industries are making them questionable on its existence to the public and the policy makers. Hence, the present study was conducted in 2003-04 crushing season to identify the major causes/factors affecting losses of sugar industries in Bangladesh, estimate the growth trend of sugar industry performance after its establishment, determine the break-even point and to formulate recommendation for obtaining profit of the sugar industry. The finding of the study is expected to help all kinds of stakeholder to make the industry viable.

Keywords: Sugar industry, Performance, Break-even point, Profit and loss, Capacity utilization, Management gap

Location: All sugar mills of Bangladesh

Start Date: 01-01-2003

End Date: 30-06-2004

Program Area: Socio-economic and Policy

Non-commodity: Performance

Objectives:

1. To identify the major causes/factors affecting losses of sugar industries in Bangladesh,

2. To estimate the growth trend of sugar industry performance after its establishment,

3. To determine the break-even point and to formulate recommendation for obtaining profit of the sugar industry.

Methodology:

All sugar mills of Bangladesh were selected for the study. Data were collected mainly from the secondary sources. Data requirements were in terms of : (1) Sugar production capacity (MT), (2) Sugarcane area in hectare, (3) Sugarcane production and supply to the mills (MT), (4) Sugar production (MT) with sugar recovery percentage, sugarcane price (Tk.lMT), sugar processing cost (TK./MT), adoption of sugar production technology and profit/losses of sugar industries of Bangladesh from 1971-72 to 2003-04 crushing years (BSFIC, 1972-2004). These data and information were generally collected from published sources like annual report/MIS report of BSFIC, BSRI, DAE, DAM, BB and BBS. Descriptive statistics and time series data used to analyze the data of the project. The analytical models were used for the purpose of economics of sugar industry performance in Bangladesh by the following methods of Growth trend in sugarcane area, production, factory supply, sugar production, capacity utilization, and recovery % by the exponential function and Break even analysis of sugar production.

Source of Information: BANGLADESH JOURNAL OF SUGARCANE, Vol. 24-27, pp. 128-136, July 2005, ISSN- 1991-8925.

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

The economy mainly of northern region, of the country largely depends on sugar industry. Every year the sugar industry is incurring a huge amount of losses for which the industries are making them questionable on its existence to the public and the policy makers. Hence, the present study was conducted in 2003-04 crushing season to identify the major causes/factors affecting losses of sugar industries in Bangladesh, estimate the growth trend of sugar industry performance after its establishment, determine the break-even point and to formulate recommendation for obtaining profit of the sugar industry. The finding of the study is expected to help all kinds of stakeholder to make the industry viable.

Knowledge Management: Journal