What has further disgusted the people is the blame game of the high-ups in the government regarding the price spiral of essentials, including sugar. While addressing the media men in the conference room of the industries ministry on April 25, the minister for industries Matiur Rahman Nizami revealed that the country's sugar production could only meet 10-12 percent of the domestic demand and 8-10 lakh tons of sugar had to be imported to fulfil the demand.

The fourteen sugar mills under BSFIC produced 133,000 tons of sugar in the current season, which is 7,000 tons less than the target. He reportedly said that the allegation that prices of essentials were determined by a syndicate was not at baseless and controlling the prices of essentials was not the headache of the industries ministry.

The minister for finance and planning M Saifur Rahman is on record blaming the commerce ministry several times for its failure to control the prices of essentials, including sugar.

A BNP lawmaker and former commerce minister Amir Khosru Mahmud Chowdhury recently told the BBC that the commerce ministry had nothing to do with price hike of essentials. It was the responsibility of the finance ministry, which had control over duty and tariffs, subsidy, monetary policy and various other means to do the same.

People became frustrated when the newly appointed commerce minister Hafiz Uddin Ahmed after visiting some markets in the capital on April 26 told that the prices of essential commodities were within tolerable limits. He was quick to add that he needed cooperation and support of the ministries and agencies concerned to check further price hike of essentials.

Let us now see what are the factors that are responsible for low production of sugar in the country and led to the recent unprecented rise in the price of sugar?

First, available data reveal that there has been a sharp decline in crop acreage as well as production of sugarcane in recent years. While in 1993-94 the crop area stood at about 4.47 lakh acres, it has now come down to slightly over 2 lakh acres. This has been primarily attributed to the following causes:

• According to available information, Bangladesh ranks the lowest in the world in per acre yield of sugarcane -- only 15 tons, while the comparative figures for Cuba, Indonesia, Australia, and Hawaii are 36, 45, 55, and 70 tons respectively. Better agronomic practices and use of improved varieties of cane in all the farmland both within the mill zones and outside mill zones may help bring better per acre yield.
• As a result of low yield, the prices (Tk 43 for field purchase and TK 4k for mill-gate purchase per maund) offered by the BSFIC can hardly cover the production cost, giving almost no financial incentive to the growers.
• Sugarcane is an annual crop keeping the land occupied throughout the year and as a result many growers have switched over to other crops that are more profitable than sugarcane.

Second, available information suggests that recovery of sugar from sugarcane is the poorest in Bangladesh -- only 7.4% compared to 9% in Indonesia, 12.3% in Cuba, 12.4% in Hawaii, and 15.6% in Australia. The low rate of recovery of sugar from cane in the country is not cost effective.

Third, many of the sugarcane growers sell their produce to molasses-makers at higher prices, although law prohibits such sale within mill-zones.

Fourth, the rise in prices of sugar is about 100 percent over a period of last one year. There is no denying the fact that the price of sugar has increased in the international market, for Brazil, the world's largest exporter of sugar, has scaled down the volume of export in recent months. Moreover, there has been continuous erosion in the value of the Bangladeshi taka against the US dollar. These two factors have led to the increase in the cost of imported sugar to some extent.

Fifth, private sector importers have the dominant role in the import of sugar. Although the rise in the price of sugar in international market influenced the rise of sugar price in the country, yet the fact remains that the recent all time high price of sugar was largely due to the machinations of a handful of traders who formed cartel to control the sugar market. No open way competitive system for import has given rise to the hegemony of a particular group of businessmen close to the establishment on import and created opportunity for them to manipulate the price of imported sugar.

To conclude, the demand for sugar will be increasing substantially with the current trend of rapid urbanization in the country. To address the problem of shortage of domestic sugar production, all efforts are needed to significantly increase per acre yield of sugarcane and the recovery rate of sugar from sugarcane. Higher yield of sugarcane will be a big incentive to the growers.

Here the Sugarcane Research Institute (SRI) and the Directorate of Agriculture Extension (DAE) have to play the major role. The government must render all necessary assistance to them in achieving the aforesaid goals. A near self-sufficiency in domestic sugar production will save the country's hard-earned foreign exchange required for the import of sugar as well as the public from the profit-mongering sugar traders.

M. Abdul Latif Mondal is a former Secretary to the Government.