Sugar costlier by Tk 10

Sugar prices have gone up at both wholesale and retail markets in Dhaka and Chattogram in a span of a week owing to tight supply and millers' call for adjusting the price in line with rising global rates. 

Retailers and wholesalers said both refiners and dealers have increased the price of the sweetener by tightening supply and citing that the price has gone up in the international market.

Sugar is currently selling at Tk 148 to Tk 150 per kg even though the government has set the maximum price for the branded item at Tk 125 and the non-branded item at Tk 120.

A week ago, the essential item was sold at Tk 120 to Tk 140 per kg, according to data compiled by state-run Trading Corporation of Bangladesh.

Abul Hashem, a wholesaler at the capital's Moulvibazar, says sugar was sold at Tk 4,730 per maund (37.32 kgs) on Tuesday and the price fell slightly to Tk 4,700 on Wednesday, up from Tk 4,650 a week earlier.

Refiners are not complying with the prices fixed by the government due to the spike in international markets and import costs amid the persistently dearer US dollars. Apart from this, there is no supply of packaged sugar in the market.

On Monday, refiners urged the government to raise the retail price of packaged sugar by 20 per cent to Tk 150 a kg.

An official of the commerce ministry yesterday said that after Eid-ul-Azha, there will be a meeting of mill owners with the Bangladesh Trade and Tariff Commission to adjust the price.

Abdur Razzak, a wholesaler in Chattogram's Khatunganj market, said the sugar price increased by Tk 150 to Tk 220 per maund within a week.

Now sugar is being sold at Tk 4,800 to Tk 4820 per maund, which was Tk 4,600 a week ago, he said.

Rakib Hossain, a retailer in the port city, is now selling the item at Tk 148 to Tk 150 per kg and claimed traders like him are not getting adequate supply.

Sugar price is on the rise in the global market.

The sugar price averaged $0.45 a kg in March but it rose to $0.53 in April and further to $0.56 in May, data from the World Bank showed. This means sugar has become costlier by 25 per cent between March and May.

In another blow for the global market, India is not considering allowing sugar exports until at least the first half of 2024, as the government is worried the El Nino weather pattern could reduce rainfall and dent production, reported Reuters last week citing government sources.

India is the world's second-biggest sugar exporter and it usually decides the amount of the sweetener mills can export before the start of the new marketing year on October 1.

The delay in shipments from India could push up global sugar prices, already trading near an 11-year high.

At the start of the current sugar season to September 30, the industry pegged this year's output at 36 million tonnes, which has been scaled down to 32.8 million tonnes.

Due to the lower output, India allowed exports of 6.1 million tonnes for this season. As the quota is exhausted, India is currently not exporting sugar, according to the Reuters article.

Bangladesh consumes 20 lakh to 22 lakh tonnes of sugar each year. Of the volume, local mills produce 30,000 to 35,000 tonnes, forcing the country to rely on imports facilitated by five refiners.

Bangladesh imports crude sugar from Brazil, India, Australia, the UK, and Malaysia.

The withdrawal of the duty reduction facility by the National Board of Revenue (NBR) also played a part in the latest hike in the price of sugar since the cost of production went up, industry people said.

In February, the NBR slashed the 30 per cent regulatory duty by 5 percentage points. The revenue authority also removed the import duty on unrefined and refined sugar, which previously stood at Tk 3,000 per tonne and Tk 6,000 per tonne respectively, with a view to keeping the price of the item in check amid the rising cost-of-living.

These facilities were in effect until May 31, after which importers were required to pay the taxes in full.