There sugar market has not stablised despite repeated meetings between traders and the government’s policymakers on prices of the commodity. If the government takes one step forward, the traders backtrack two steps. Customers are purchasing sugar at a much higher price than the price set by the government. The high prices are turning the taste of sugar bitter for the consumers.
According to a Prothom Alo report, mill owners want to increase sugar prices on the pretext of the global market. Bangladesh Sugar Refiners Association said on Monday that they will sell packet sugar at Tk 150 a kg and loose sugar at 140 a kg from 22 June. The association conveyed its decision to the Bangladesh Trade and Tariff Commission (BTTC) in a letter.
Policymakers of the government became active after that. BTTC held a meeting with mill owners and it was decided that the price of sugar will not be raised. BTTC will sit with the mill owners after Eid-ul-Azha to adjust the price. The BTTC said sugar, which was imported with reduced duty, is still available in the market, so there is no logic for raising sugar price now.
Sugar market has long remained stable. Currently, price of packet sugar is Tk 125 a kg and price of loose sugar is Tk 120 a kg as per the price set by the government. The Trading Corporation of Bangladesh (TCB) under the commerce ministry sells sugar at Tk 130-140 a kg.
According to BTTC, global price of sugar increased about 22 per cent in last year. The price of unrefined sugar rose 33 per cent in international makers, but it increased by 58 per cent in the local market, meaning that rate of sugar price hike is much higher in local market than the global market. The global price of sugar was 552 US dollars a tonne on 8 June 2022, which increased to 673 US dollars a tonne on 8 June 2023.
In addition to the rise in global price, there is another reason behind the rise in price of sugar in local market. The government has imposed a 62 per cent customs duty on the import of unrefined sugar and a 67 per cent custom duty on the import of refined sugar in the name of saving the local industry. The reality is sugar locally manufactured meets only 1 per cent of total demand. Besides, market experts said the recent crisis, delay in unloading sugar from ships and market manipulation by traders are also responsible for the price hike.
Recently, the commerce ministry sent a letter to National Board of Revenue (NBR) to reduce tariffs on sugar imports. As tariff reduction did not continue, customs duty has increased from 1 June.
There can be no justification to import sugar in a country where sugarcane grows. We think it is suicidal decision of the government to depend entirely on import for sugar despite the huge production of sugarcane in Bangladesh. Contrary to the demands, sugar mills have been shut down on the excuse of incurring loss. This import dependency of the government in many sectors including fuel is forcing customers to spend more money and also causing an economic crunch.
The government seems to have no sustainable policy or plan on the import of consumer products. To tackle the situation, sometimes they reduce duty, sometimes they raise duty. Though businesses profit from this, customers have to spend money. Import duty must be reduced to keep sugar market stable. At the same time, market monitoring must be strengthened so that no one can sell sugar at a price higher than fixed.