Supply crunch fuels sugar price
Sugar prices have increased again in Dhaka and Chattogram amid a supply crunch.
Private mill owners said imports were normal, but they see no way out of the price spiral as there is a lack of sufficient gas supply to refine sugar.
They added that a shortage of dollars and complexities in opening Letters of Credit (LCs) may result in import shortages in the future.
The government raised prices of sugar in the first week of October in an apparent move to catch up to the market as traders were already selling it at higher rates than previously fixed prices.
According to the new government rates, loose sugar should cost Tk 90 a kg and a packaged sugar Tk 95 a kg in the retail market.
But loose sugar is currently being sold at Tk 100-110 a kg in the retail market, while packaged sugar is currently hard to find.
The Tk 10-15 hike in price of sugar per kg has increased hardships for consumers already struggling to cope with spiralling prices of essentials.
Retailers and wholesalers in several areas of Dhaka said the supply of loose sugar is declining and that the packaged variety is not available everywhere.
A trader in Moulvibazar, a wholesale market in Old Dhaka, said, "For the last one week, we have not been getting sugar from the mills as per the demand. So, the price has gone up. It is not possible to sell sugar at the price fixed by the government."
Monwar Hossain, owner of Yasin General Store in the capital's Karwan Bazar, said the situation is such that the price of sugar will rise again.
Traders of Khatunganj-Chaktai wholesale market in Chattogram said sugar prices have gone up by Tk 450 to Tk 500 per maund (37.32kg) in the local market in one month.
According to the traders there, sugar is now sold at Tk 3,480 to Tk 3,500 a maund, which was Tk 3,000-3,050 a month ago.
Sugar prices have increased by 19.5 percent in the past one year, according to the Trading Corporation of Bangladesh, although the international media reported freight cost for imports has almost halved.
Biswajit Saha, director for corporate and regulatory affairs at City Group, said, "Earlier, we could supply 3,000 tonnes of sugar daily. Now, it is 700-800 tonnes."
He said import is normal but production has come down significantly due to the decrease in the supply of gas to refining units. If the gas problem is not solved, the supply of sugar will not return to normal.
There are many complications in opening LCs and the taka has weakened, he said, fearing that imports of sugar may fall in the future.
Taslim Shahriar, senior assistant general manager of Meghna Group of Industries, said their production has decreased by 60 percent due to the gas crisis. If the crisis is not resolved, there will be a lot of problems in the sugar market.
The Bangladesh Sugar Refiners Association said they are not getting any solution even after informing the government.
Mill owners said the country's annual demand for sugar is 25 lakh tonnes. Domestic sugar mills can produce up to 1 lakh tonnes. The rest of the sugar comes from abroad.
According to data of the National Board of Revenue (NBR), 90-95 percent of imported sugar is unrefined.
Mill owners import unrefined sugar from Brazil, India, Australia, the United Kingdom and Malaysia, before refining it and supplying it to the market.
The NBR data showed that about 7.40 lakh tonnes of sugar worth Tk 4,045 crore -- including custom duties, VAT and tax -- were imported during the first three and a half months of this fiscal year, till October 20.
The Directorate of National Consumer Right Protection (DNCRP) will conduct a countrywide drive today at refineries to verify the claims of lack of adequate gas supply, a senior DNRCP official told The Daily Star.
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