AN ECONOMIC STUDY ON SUGARCANE PRICING AND ITS IMPACT ON SUGAR PRODUCTION IN BANGLADESH

Abstract

The study was conducted to determine the pricing system of sugarcane and sugar and its impact on sugar production of Bangladesh. Data were collected from secondary sources for the period of 1971-72 to 2008- 09. Descriptive analysis, log linear model and Nerlovian partial adjustment model were used to analysis the data. It is found from the study that the growth rate of area and production of sugarcane, sugar, recovery of sugar and price were 1.3, 3.1, 3.0, 0.00 and 5.60 percent respectively. Study revealed that sugarcane production depends on the sugarcane area of current year and sugarcane price of previous year. The coefficients of sugarcane area and previous year price were 1.27 and 0.25 and significant at 1% level. It is also found that the price of other agricultural crops increased faster rate than sugarcane and sugar price. Procurement price of sugarcane should remunerative to keep the farmers in sugarcane production. Domestic sugar price should be reviewed compared to production cost and market price of others essential commodities.