Sugar price records fresh hike despite duty cuts
Sugar prices have gone up in Bangladesh in the past one week owing to its spike in the global markets and higher US dollar costs and supply crunch at home.
The increase came even after the import tariff on raw and refined sugar was halved by the National Board of Revenue on November 2 in an attempt to contain prices in the domestic market.
Owing to the tax cut, importers now need to pay Tk 1,500 as the specific duty to buy each tonne of raw sugar from international markets, down from Tk 3,000 earlier.
Similarly, the specific duty on refined sugar was slashed to Tk 3,000 from Tk 6,000.
Yesterday, retailers and wholesalers said both refiners and dealers have increased the price of sweetener.
Sugar was selling at Tk 140 to Tk 145 per kilogramme, up from Tk 130 to Tk 135 a week earlier, according to data compiled by state-run Trading Corporation of Bangladesh.
This means the price has increased by 7.55 percent in the past week.
The NBR, however, retained the 15 percent value-added tax and the 30 regulatory duty on raw and refined sugar imports.
Sugar was sold at Tk 6,900 per 50-kg sack yesterday, which was Tk 6,400 a week ago, according to Tanvir Hossain, a wholesaler in the capital's Karwan Bazar, one of the biggest kitchen markets in Dhaka.
"When dealers were asked about the reason for the price increase, they said that it has gone up mainly because of the shortage of the US dollar. Besides, the increase in the price of sugar in the international market has affected the local market."
In the international market, the price of sugar was $0.40 per kg in the July-September period of 2022 and it rose to $0.54 in January-September this year, according to World Bank data on commodity prices. It increased to $0.57 in October.
Nayeem Hossain, another wholesaler, said he received 10 sacks of sugar yesterday against a demand of 20 to 30 sacks and that too came after trying for a week.
Enamul Haque, a retailer in the port city of Chattogram, said he was selling sugar at Tk 142 to Tk 150 per kg. One week ago, it was Tk 130 to Tk 132.
Abdur Razzak, a wholesaler in the Khatunganj market, sold sugar at Tk 5,000 per maund (37.32 kgs), which was Tk 4,700 a week ago.
"An adequate supply of sugar is not available," he said.
Md Taslim Shahriar, senior assistant general manager of Meghna Group of Industries, a top commodity importer and processor, said the market has been affected by the rising prices in the international market and the high cost of the dollar.
The taka has lost its value by about 30 percent against the greenback since January last year, making imports costlier.
"We face difficulty in opening the sufficient quantity of letters of credit," Shahriar said.
Bangladesh consumes 20 lakh to 22 lakh tonnes of sugar each year. Of the volume, local mills produce 30,000 to 35,000 tonnes, forcing the country to rely on imports facilitated by five refiners.