Sugar market to be stable soon

Staff Reporter :
The sugar market will return to normalcy in a day or two, said AHM Shafiquzzaman, director general of the Directorate of National Consumers Right Protection (DNCRP), on Monday.
“We are conducting drives at markets today. If we find any illegal hoarding of sugar, legal steps will be taken against the responsible traders,” he told reporters after a meeting with the sugar traders in the capital’s Karwan Bazar.
Processors say they are failing to refine the raw sugar for the lack of adequate gas supply, which has forced them to cut output by up to 50 per cent. This is disrupting the supply of sweetener in the market.
In the last two days, the DNCRP spoke to the top officials of the gas distribution companies and their parent company, Petrobangla.
“The officials assured me that they would ensure gas supply in the zones where sugar refineries are located,” said Shafiquzzaman.
“There is nothing to be panicked about,” he added.
In the last several days, sugar prices rose across the country amid the supply crunch.
Currently, loose sugar is being sold at Tk 100-110 per kg in the retail market. Packaged sugar is currently hard to find.
According to government-fixed rates, the price of loose sugar is Tk 90 per kg while that of branded sugar is Tk 95.
Sunday Bangladesh Bank (BB) said some 100,000 tonnes of sugar will be imported soon.
The central bank issued a notice saying that there was no supply shortage of sugar in the market currently.
“We hope sugar prices will stabilise if a little bit of monitoring is done on the market,” according to the notice.
GM Abul Kalam Azad, spokesperson of Bangladesh Bank, said the country imported 1.7 million tonnes of sugar last year.
Some 1.65 million tonnes of sugar were imported in the first 10 months of this year, he also said.
Around 50,000 tonnes of sugar will be imported in the quickest possible time as letters of credit for the good have already been opened, he said.
Preparations have already been taken to import another 50,000 tonnes soon, Azad added. Refiners demanded the government withdraw all duties on import of raw sugar due to skyrocketed prices of sugar in the local market. They also requested ensuring uninterrupted supply of gas to their production units so that they could continue operations and supply of the essential item.
The Bangladesh Sugar Refiners Association (BSRA) in a recent letter to the Commerce Ministry submitted a set of proposals, requesting it to take necessary steps to keep prices of the sweetener stable in the market.
It sought deferred payment facilities all year round on import of raw sugar and the MoC to instruct the banks to open letters of credit (LCs) on a regular basis without any hindrance.
The association also requested to ensure supplying required dollars to facilitate payments of imported sugar.
To keep the domestic market stable, the refiners have been importing raw sugar at international prices.
At present, the commercial banks are allowed to open LCs up to $3 million as per Bangladesh Bank instructions, but one vessel contains 55,000 million tonnes of non-refined sugar worth $ 27-28 million, according to the letter.
Currently, the banking cost has been increased significantly due to opening high volumes of LCs, it added.
Earlier, the import duty was between Tk 22,000 and Tk 23,000 per tonne.
Now, it has increased to a range between Tk 31,500 and Tk 32,000 per tonne.
As a result, the mill gate price of sugar (after refining) stands at Tk1 lakh to Tk1.05 lakh per tonne.
However, the refiners are currently selling sugar at Tk 85,000 per tonne at the mill gate.
Currently, the daily production capacity of the private refiners is about 10,200 tonnes. The country’s annual demand for sugar is from 1.8 to 2.2 million tonnes. It imports 2.7 to 2.8 million tonnes of raw sugars annually.