Sugar prices at Khatunganj see sudden jump, syndicate manipulation blamed

Highlights

• Sugar prices had been steady for over a year
• But wholesale prices jump by Tk120-Tk150 per maund within a week
• Traders cite suspension supply shortfall at mill level as reasons
• Consumer rights groups allege millers deliberately creating artificial crisis

After months of steady decline, sugar prices have risen sharply at Chattogram's Khatunganj – the country's second-largest wholesale market – fuelled by allegations of syndicate manipulation and supply disruptions.

Wholesale sugar prices in Khatunganj have jumped by Tk120-Tk150 per maund within a week, reversing a prolonged downward trend that had continued for several months. The sudden increase has raised concerns among consumers and regulators, particularly as Ramadan approaches.

Market data show that in July 2024, sugar was selling at Tk4,440 per maund in Khatunganj. Prices then fell steadily to Tk3,210 by late November. However, the trend has now stalled, with wholesale prices climbing to around Tk3,400 per maund this week, compared with below Tk3,250 just a week earlier. 

Infographics: TBS

While the impact has not yet fully filtered through to the retail market, traders warn that sustained increases at the wholesale level will soon put pressure on consumers.

Traders attribute the volatility to the suspension of white sugar imports and a supply shortfall at the mill level. According to the Khatunganj Trade and Industries Association, government approval for white sugar imports last year helped stabilise both supply and prices. With that facility now withdrawn, the market has become increasingly dependent on refined sugar produced locally.

Mill owners have also cited annual maintenance and overhauling of machinery in December, which has temporarily disrupted refining operations. As a result, supply from mill gates has slowed, forcing traders to wait longer for delivery orders. Wholesalers report waiting periods of eight to eleven days to receive sugar from mills, compared with normal turnaround times.

Allegations of syndicate hoarding

However, consumer rights groups have rejected these explanations, alleging that millers are deliberately creating an artificial crisis. The Consumer Association of Bangladesh (CAB) claims that despite adequate stocks in the market, supply is being curtailed to drive up prices ahead of Ramadan, taking advantage of reduced administrative oversight during the election period.

SM Nazer Hossain, divisional president of CAB Chattogram, said traders had begun preparing for price hikes well in advance of Ramadan, despite no real shortage. He warned that weakened market monitoring amid election-related administrative pressures was allowing unscrupulous actors to exploit the situation, adding that the lack of accountability was contributing to market instability.

Echoing similar concerns, Mohammad Shahid, joint general secretary of the Chattogram Dealers' Association, noted that international sugar prices have fallen and the government had reduced import duties, factors that should have pushed domestic prices lower. Instead, he alleged, mill owners are increasing profits by keeping prices artificially high.

Meanwhile, consumer authorities have said they are monitoring the situation. Mohammad Foyez Ullah, deputy director of the Directorate of National Consumer Rights Protection in Chattogram, said the agency is aware of the reported price rise and will take legal action if irregularities are confirmed.