Sugar prices edge up as traders tighten supply
Sugar prices have gone up at both the wholesale and retail levels amid hoarding by traders on speculation of reduced supply after the fire incident at S Alam Refinery, one of the largest raw sugar importers and refiners in Bangladesh.
Refiners, including S Alam Refinery, however, said they have enough stock and a good amount of raw sugar is on the way, which will be enough to meet increased demand for the sweetener during Ramadan.
Meanwhile, the Trading Corporation of Bangladesh (TCB) has increased its sales price of sugar by 43 percent, or Tk 30 per kilogramme (kg), in an effort to contain subsidy bills.
From today, the state agency will sell the sweetener at Tk 100 per kg along with soybean oil, lentil, dates and rice at subsidised rates to one crore families who were given cards earlier.
Humayun Kabir, spokesperson of the TCB, told the Daily Star that the amount of subsidies for sugar has increased as the sweetener is being bought at higher prices.
This is because the price of sugar has been spiralling in the international market while import costs have risen for the devaluation of taka.
"So, we have taken the decision to increase the sales price of sugar," he added.
Sugar is currently being sold at Tk 140 to Tk 150 per kg at retail in Dhaka.
Following the fire at the factory in Chattogram on Monday, sugar prices rose by Tk 100 per maund (37 kgs) at wholesale in Chattogram and Dhaka.
At retail, the price of sugar has edged up by as much as Tk 3 per kg, traders said.
Alauddin Ali, a wholesaler at Khatunganj, one of the largest wholesale markets for essential commodities in Chattogram, said sugar sold for Tk 5,030 per maund on Wednesday, up from Tk 4,930 the previous day.
Traders who have Supply Orders (SO) to take delivery of sugar from mills are showing reluctance to sell the orders to others, said Alauddin Ali, a wholesaler at Khatunganj.
SO holders can take delivery of the commodity from the issuer or mills by showing the receipt.
The retail price of sugar has risen to Tk 145-146 per kg, up by Tk 2 to Tk 3 per kg within a day, Ali added.
The wholesale price increased in Dhaka, too, said Abul Hashem, a trader at the capital's Moulvibazar, a wholesale hub for sugar and edible oil.
The spike in the price of sugar is a reflection of the fire incident at S Alam's refinery, said Aminul Haque Amin, a wholesaler at Karwan Bazar, one of the largest kitchen markets in Dhaka.
However, Saiful Alam Masud, chairman of S Alam Group, told reporters on Tuesday afternoon that there was no damage to the factory even though the warehouse was damaged in the fire.
Production can be started within a day or two, he said, adding that there is still enough stock to meet demand for Ramadan.
"There is no possibility of price hikes ahead of Ramadan," he added.
The fire broke out at a warehouse of S Alam Refinery on Monday and came under control after 18 hours.
Between January 1 and March 4 this year, sugar imports increased 46 percent year-on-year to 4.74 lakh tonnes, data of the National Board of Revenue showed.
Biswajit Saha, director of corporate and regulatory affairs at City Group, one of the biggest commodity processors, said they did not hike their sugar price and are selling the sweetener at Tk 134.8 per kg from the mill gate.
"We have no shortage of sugar and vessels with sugar are coming although we face problems in opening letters of credit for import. So, there is no reason for the price to rise," he added.
Taslim Shahriar, deputy general manager of the Meghna Group of Industries (MGI), echoed the same.
"There will be no dearth in the supply of sugar during Ramadan," said the official of MGI, which runs one of the five sugar refineries in the private sector.
Bangladesh consumes roughly 20 lakh tonnes of sugar each year and the month of Ramadan accounts for 3 lakh tonnes. The nation has to meet about 98 percent of its requirement through imports of raw sugar because of scanty domestic production.