Under-invoicing on imported sugar affecting its market price

The sugar refiners in the country have recently expressed their dissatisfaction with certain importers who are deliberately underestimating the value of their shipments of refined sugar. This tactic is employed to maximise their profits due to the higher prices of sugar. Unfortunately, this practice not only harms local mills by reducing the competitiveness of their product, but it also deprives the government of its rightful revenue.

In light of this situation, the BSRA (Bangladesh Sugar Refiners’ Association) has urged the tax administrator to strengthen import regulations and establish a reasonable price for refined sugar that aligns with the current market conditions.

The domestic sugar industry plays a vital role in the economy by meeting the demand for sugar and providing employment to a significant number of workers. Hence, the primary concern of the BSRA is to ensure market stability, as any disruptions would not only affect the mills but also jeopardise jobs.

Currently, Bangladesh requires approximately 20 to 22 lakh tonnes of sugar annually. However, local mills can only produce 30,000 to 35,000 tonnes, making it necessary for the country’s five refiners to import raw sugar. Presently, the global market price for raw sugar is around $600 to $700 per tonne, while refined sugar is priced at $750 per tonne.

BSRA members dutifully pay substantial amounts of tax when importing raw sugar. Consequently, the increase in global prices has had a positive impact on the government’s revenue collection from sugar shipments, surpassing Tk 5,000 crore last year. However, recent media reports suggest that refined sugar is being imported at prices as low as $430 per tonne in certain cases.
This discrepancy arises because unethical importers frequently understate the import prices to avoid paying duties and taxes. This underscores the significance of verifying prices and implementing regulatory measures.
As a result of higher production costs, consumers are being compelled to pay more than the government-fixed rate for sugar, as local millers and refiners have had to adjust their prices accordingly. The ongoing crises related to the US dollar and energy, stemming from the Russia-Ukraine war, have caused market volatility since July-August last year, leading to inflated global prices for raw sugar and fuel.