The government has allowed two private refiners to export a total of 57,273 tonnes of sugar this fiscal year, according to commerce ministry officials.

The nod for sugar export comes at a time when the state-run Bangladesh Sugar and Food Industries Corporation (BSFIC) is importing the sweetener on behalf of the government to boost public stock such that it can intervene in the market in case of a price spiral in the domestic market.

BSFIC had initially invited bids for the purchase and received four, two of which were from local refiners. London-based ED&F Man Sugar Limited finally got the contract with the lowest offer, $470 per tonne.

City Group of Industries, which owns the country's largest sugar refinery, got the permission to export a total of 50,000 tonnes of refined sugar and Deshbandhu Sugar 7,273 tonnes until June 30, 2018.

“We have given permission so that the refiners can utilise their production capacities, which are higher than the domestic requirement for sugar,” said a senior official of the commerce ministry.

The private millers have enough stock of sugar, so the export will not hamper supply in the domestic market, he added.

Meanwhile, the BSFIC, which runs 15 state sugar mills, got the approval from the cabinet committee last month to buy 50,000 tonnes of sugar from London-based ED&F Man Sugar Limited.

The state corporation plans to import 1,00,000 tonnes of sugar as it is currently sitting on scanty stocks.

Last month, the BSFIC said it will have only 18,480 tonnes of sugar for public sales after distributing the sweetener to law enforcement agency personnel.

Besides, production at state mills might be 80,000 tonnes rather than the targeted 1 lakh tonnes in the upcoming sugarcane crushing season owing to damages to four mills up north.

The prices of sugar have fallen to Tk 49-50 each kilogram at mill gate after the waiver of duty and VAT by the National Board of Revenue for the import of sugar by the BSFIC, said Bishwajit Saha, general manager for marketing for City Group.

At the retail level in Dhaka      city yesterday, sugar prices declined 3 percent to Tk 55-58 per kilogramme from Tk 56-60 a month ago, according to the Trading Corporation of Bangladesh. Earlier, refiners sold the sweetener at Tk 52 per kilogramme at the mill gate, he said.

“We have a huge stock, so we have sought permission for export.”

City Group has 2.85 lakh tonnes of stock of sugar and letters of credit for import of 2 lakh tonnes have been opened. “We have order for shipment to Nepal. We also want to export to China,” he added.

The government withdrew restriction on sugar exports in October 2012 in the face of demand from local refiners that they could not utilise their total annual processing capacity of 35 lakh as domestic consumption was less than that.

The US Department of Agriculture estimates Bangladesh's annual consumption to be more than 23 lakh tonnes.

The government, however, tagged conditions that require exporters to get prior permission from the commerce ministry for shipment.

The notification also said that exporters need to submit application to the commerce ministry based on recommendation from Bangladesh Sugar Refiners Association about their stock position.

The Bangladesh Tariff Commission would analyse the overall stock situation of sugar in the country and imports in the pipeline and recommend whether sugar could be exported or not.

At least 10 percent value addition will be required to export sugar, which is imported in the raw form, according to the notification.

Due to scanty domestic production of sugarcane, Bangladesh meets 95 percent of its annual demand for the sweetener by processing imported raw sugar mainly from Brazil and Argentina, according to processors.

Sugar and sugar confectionary exports fell 40 percent year-on-year to $17.63 million in fiscal 2016-17, according to data from the Export Promotion Bureau.