Sugar price hovered around Tk 60 a kg at retail level in the city market yesterday, marking about 25 percent rise in a week.
Market operators said the rise was largely fuelled by panic buying mainly by retailers and a section of consumers speculating further rise.
Operators also linked the price spiral to a seasonal factor such as rise in demand during Ramadan when families use to entertain their relatives, friends and neighbours with various sweetmeats with sugar used as a major ingredient.
“Customers are buying higher quantities of sugar. Many of them are also buying much more than their demand now to avoid further price shock,” said Mohammad Ratan, a retailer at Karwan Bazar kitchen market.
Added to this, many of the retailers and other traders were also in the run for procuring additional quantity of sugar to bag extra profit from possible price hike in the coming days, especially on the occasion of Eid.
In the morning hours yesterday, sugar sold at Tk 55-56 a kg at retail level in different city markets. Sugar price rose to as high as Tk 58-60 a kg as wholesale price shot up to about Tk 2,750 per 50 kg at Moulvibazar, and more than Tk 2,900 at Karwan Bazar -- two major markets in the city.
In the past couple of weeks, price of the import-oriented commodity has been on a gradual surge on the domestic market, influenced by rise in its price on the international market due to supply shortfall on account of draught in India and slow harvest in Brazil, two biggest sugar producing nations.
Industry sources said Bangladesh has fallen into the global price rise as it meets more than 90 percent of its annual sugar demand of over 12 lakh tonnes through import.
In the past week, global price of sugar however plunged. Raw sugar, which local refiners import mainly, fell for five straight sessions through Monday amid speculation the highest rates in 28 years will curb demand, according to a Bloomberg report.
To cushion consumers from the price shock of international market, the government withdrew import duty on unrefined sugar and reduced duty on refined sugar last month.
Refiners also promised to sell the sweetener at Tk 39 per kg after duty cut.
But the price, after registering a dip for a few days, rebounded.
“There is a shortage of refined sugar on the wholesale market compared with the demand which causes rise in price,” said Abul Hashem, vice-president of Bangladesh Wholesale Sugar Merchants Association, claming that demand for sugar has increased during Ramadan.
Refiners however turned down the argument of rise in demand for sugar, and said they are supplying about 4,000 tonnes a day, a portion of which is going to Trading Corporation of Bangladesh (TCB) for open market operation.
“It's mainly because of panic and rush buying,” said Fazlur Rahman, chairman of City Group of Industries, the leading sugar refiner.
Golam Mostafa, general secretary of Bangladesh Sugar Refiners Association, also attributed panic buying among retailers behind the rise in sugar price.
Mostafa suggested fixing the supply chain to check unusual rise in prices. “It requires introducing distributorship to curb unusual price rise and ensure accountability in supply chain,” he said.