No packaged sugar in market, non-packaged also scanty

Packaged sugar has now almost disappeared from markets in the capital while the non-packaged one is also in supply shortage, causing further hike in prices.

On Friday, sugar sold at Tk130-140 in markets such as Karwan Bazar, Moghbazar and other parts of the capital. The price is Tk10-15 higher than the government-set Tk120-125 per kg.

The Ministry of Commerce early last month allowed refiners' to raise the retail price of sugar by Tk16 a kg following the price hike in the international market. 

Trading Corporation of Bangladesh data says the price of sugar has more than doubled over the past year. It sold for Tk80-84 per kg last year.

Talking to The Business Standard, retailers said they are not getting the supply of packaged sugar for the last 15-20 days. They get non-packaged sugar on conditions and the amounts are less than their demand.

"Sales representatives of sugar suppliers have not been taking orders for about 20 days. For non-packaged sugar, we are forced to buy flour, tea leaves or other items at a time while ordering sugar. Yet, the price of sugar at wholesale shops is high. They ask Tk125 for a kg," Mohammad Kabir, shopkeeper of Haji Mizan Enterprises at Karwan Bazar, said.

"We have no profit in sugar now, which is why many retailers are avoiding selling sugar," he told TBS.

Ali Hossain, another salesperson, added that many customers are getting back as they do not get all their commodities, including sugar, in single shops. "We are losing business. Customers are bothered. The government should fix the sugar crisis as early as possible."

Sugar suppliers have repeatedly blamed abnormal dollar prices, inability to open LCs, high import duties and global volatility for the sugar crisis. To get rid of this situation, they have proposed the government reduce import duties for a long-term.

The government reduced the regulatory duty on sugar imports by 5% to 25% for a short period to stabilise the market during Ramadan. It also withdrew the specific duty of Tk3,000 per tonne on the import of unrefined sugar and Tk6,000 on refined sugar at that time. 

"However, these facilities are not in place now," said Golam Rahman, secretary general of the Bangladesh Sugar Refiners Association. 

He told The Business Standard that as the tariff facilities have been withdrawn, the price of sugar increased by Tk8 per kg. "On top of that, global prices are also high. High dollar prices and restrictions on LC opening are also the reasons."

"Supplying 50kg sacks of sugar is not feasible now. With the increase in the price, the cost of producing packaged sugar went high. If we supply packaged sugar, it would be Tk4.5 higher per kg than the government fixed rate," he explained.

Calling for a government subsidy to keep sugar prices at an affordable level for now, the secretary general said they have applied recently to the government to increase the sugar price to Tk140 per kg.

The task force on commodity markets under the commerce ministry presented a report in a ministry meeting on 11 June, where it highlighted the sugar crisis. 

The sugar supply is facing a deficit of 72,000 tonnes for FY23, according to the report. "The annual demand for sugar is about 20 lakh tonnes, but lower imports due to the dollar crisis have created a supply shortfall," it said.

Apart from sugar, onion prices also increased by Tk5 per kg over the past week, despite new imports from India. On Friday, local varieties of onion sold at Tk80 per kg and Indian varieties at Tk70 per kg in retail.