Bangladesh’s state sugar mills face cash crunch as BSFIC struggles to pay cane farmers
BSFIC’s funding shortfall threatens timely payments to sugarcane farmers and deepens financial strain on state-owned mills.
BANGLADESH – The financial stability of eight state-run sugar mills has come under renewed pressure as the Bangladesh Sugar and Food Industries Corporation (BSFIC) faces a significant funding shortfall during the ongoing 2025–26 sugarcane crushing season.
The corporation is struggling to secure the cash required to pay sugarcane farmers, raising concerns over potential disruptions to supply and operations.
According to official data, BSFIC has an outstanding claim of Tk 80.80 billion (US$661.34M) against the government, stemming from trade gaps and subsidies accumulated over the years.
Despite this large receivable, the corporation remains short of Tk 3.30 billion (US$27.01M) needed to settle current dues to farmers, underscoring the long-standing financial distress within the state-owned sugar industry.
The BSFIC, which operates under the Ministry of Industries, has approached the Ministry of Finance to obtain approval and release of the outstanding funds necessary for cane payments.
For the 2025–26 season, the corporation expects to crush 0.76 million tonnes of sugarcane across eight of its nine operating mills, excluding Keru & Co. (BD) Ltd. The total value of cane to be paid to farmers stands at Tk 4.80 billion (US$39.29M).
So far, the Ministry of Finance has disbursed Tk 1.5 billion (US$12.28M) in two instalments—Tk 1.0 billion (US$8.18M) on September 25 and Tk 500 million on November 25—representing only 31.27 percent of the required amount.
BSFIC officials warn that without the remaining Tk 3.30 billion (US$27.01M), the corporation risks failing to pay farmers on time, potentially triggering discontent and threatening future cane supply to the already struggling mills.
BSFIC currently oversees 15 mills with a combined annual production capacity of 0.21 million tonnes, far below the national annual sugar requirement of more than 2.2 million tonnes.
As a result, Bangladesh imports between 2.2 million and 2.4 million tonnes of raw sugar each year to meet domestic demand.
In response to sustained losses, the Ministry of Industries has initiated several projects aimed at diversifying sugar-based products and improving the commercial viability of the mills. Some initiatives are already in progress, according to officials.
BSFIC has also developed a five-year roadmap covering fiscal years 2022–23 to 2026–27, outlining steps to restore profitability.
Sources note that historical loans taken by the mills were intended to support sugarcane farmers.
Although farmers repaid these loans through cane deliveries, the mills were unable to clear their outstanding balances, contributing to the sector’s current financial burden.
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