Blame game muddies sugar speculation

Consumers cannot buy sugar at the price set by the refiners and millers last week -- but the commerce minister says it is up to the people to protest against grocers who hiked the price, expecting a pre-Ramadan surge in demand.
Although state intervention in the market is common, Commerce Minister Faruk Khan has asked the people to protest against the retailers.
“The government alone cannot control the market and the retailers,” Khan told The Daily Star. However, the minister also said he expects prior government interventions to soon cool the market price of sugar.
Both consumers and retailers usually find that the price of sugar goes up by 20 percent during Ramadan, the month of fasting, when sugar consumption increases by up to 30 percent -- and suspicions are also on most tongues.
Shopkeepers blame the wholesalers for the hike.
“We cannot sell it at lower price than the buying price,” said Md Kalam, a grocer at Kathalbagan in the city. He was selling sugar at Tk 52 per kg yesterday.
Asked, a retailer at Karwan Bazar demanded Tk 54 per kg, but would not explain why he was asking for more that the set price.
The refiners and millers set a maximum per-kilo retail sugar price at Tk 47 at a meeting with the commerce ministry on July 27. They set the mill gate price at Tk 43.
The refiners then advertised this in the newspapers, saying the price will remain the same until September 20. But no grocers in the country follow the set price.
Refiners blamed wholesalers and retailers for high sugar prices. “We cannot control the retailers. They charge higher price,” said Mostofa Kamal, chairman of Meghna Group that owns United Refinery.
Kamal cited the example that he is selling soybean (cooking oil) at Tk 65 a litre, but the retailers are taking Tk 80 plus. “There must be a market mechanism to control the retailers,” he said.
Seven sugar major refiners in the country annually produce 2.4 million tonnes against the demand of 1.4 million tonnes. Local refineries import raw sugar, mostly from Brazil.
Another 14 sugar mills managed by the state-run Bangladesh Sugar and Food Industries Corporation annually produces 125,000 tonnes.
City Group has the highest production capacity, with 1,700 tonnes per day. United Refinery has a production capacity of 1,500 tonnes a day.
Mostafizur Rahman Babul, president of Bangladesh Sugar Dealers' Association, said he finds no reason to increase the price, as supplies are ample.
“Some 4,000 dealers across the country got two tonnes of sugar each from the state-owned mills. Another three tonnes will be given soon,” said Babul.
sajjad@thedailystar.net