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Bangladesh Agribusiness Report Q3 2009Published by: Business Monitor International Published: Jun. 29, 2009 - 46 Pages Table of Contents
AbstractIn BMI's Bangladesh Agribusiness Report for Q3 2009, we introduce the new Sugar Outlook. As withmany sectors of Bangladesh's agricultural sector, sugar production is blighted by inefficiency. Averagesugar cane yields at 38.49 tonnes per hectare (tonnes/ha) in 2008 are among the lowest of any significantsugar producing country, only just over half of the world average of 71.72 tonnes/ha and well below the65.76 and 53.00 tonnes/ha achieved in neighbours India and Pakistan, respectively. Sugar cane productionhas been on a long-term downward trend and in 2008 production fell to its lowest level since 1963.Farmers have been abandoning the meagre rewards on offer for cane and moving to other, more profitablecrops.The processing sector is also struggling. The country has 15 state-run mills active in cane crushing. Themills make an annual loss running into millions of dollars. Plans to privatise the sector have been slowmoving. The Bangladesh Sugar and Food Industries Corporation (BSFIC), which oversees the mills, hasbeen consistently seeking more government protection for the domestic sugar production sector in theform of higher tariffs on sugar imports. With sugar consumption in Bangladesh reaching 1.15mn tonnes in 2008, compared to production of only175,000 tonnes, there is a large domestic market to supply if sugar can be produced profitably inBangladesh. In 2009, however, sugar production is expected to fall sharply to little over 80,000 tonnesowing to a shortage of sugar cane. There is no reason why Bangladesh should not be able to supply more of its sugar requirements fromdomestic production. Neighbouring India has produced a surplus in sugar for many years of this decade. However, we do not see the country's sugar sector improving while it is still in state hands. In other sectors, Bangladesh is set for a bumper rice harvest in 2009, up by a forecast 14.1% from the2008 level. This has been achieved through an increase in the cultivated area and good weather conditionsseeing yields rise. Unfortunately for the millions of Bangladeshi rice farmers, the large crop and pooreconomic conditions has seen prices fall to below the cost of production. While a governmentprocurement drive will provide some relief, many farmers will still be hard pushed to turn a profit on theircrops. Helping to alleviate the difficulties caused by falling prices will be a BDT15.00bn (US$218mn) stimuluspackage announced for the agricultural sector in April as part of a total BDT34.24bn (US$495mn)package designed to help Bangladesh through the worldwide economic slump. The money will ensurethat struggling farmers will have access to loans to help tide them over. Get Full Details About This Report >> |
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