Govt cuts duties on sugar import

The government has slashed duties on sugar imports to rein in the price of sugar ahead of Ramadan.

Aiming to meet the local demand and stabilise the market during Ramadan, the regulatory duty has been reduced by 5% to 25% on sugar imports. At the same time, the government withdrew Tk3,000 specific duty on import of per tonne raw sugar and Tk6,000 on per tonne refined sugar.

The reduced tariff facility will be effective immediately and remain in force till 30 May.

The National Board of Revenue (NBR) issued two separate gazettes in this regard on Sunday.

The move comes following a proposal from the commerce ministry to bring down the prices of sugar in the local market.

NBR officials hoped that the new move will help reduce sugar price by Tk8 to Tk9 per kg at retail level, however sugar refiner estimates prices will reduce by Tk5 per kg.

Sources said, the tariff commission has sent a proposal to reduce regulatory duty on sugar imports to 20%, from 30%, to provide relief to consumers at retail stage.

Requesting anonymity, an official of the tariff commission, said they would not make any comment before analysing the market.

City Group Director for Corporate and Regulatory Affairs Biswajit Saha welcomed the move expressing hope that it would help control sugar price at retail level.

"The NBR's policy support will reduce sugar price by minimum Tk5 per kg at retail level. But, the consumers might have to wait until the arrivals of new consignments to avail the benefits," he told The Business Standard.

Generally, it takes at least 45 days to import sugar from Brazil and seven days to import from India.

Another refiner has expressed concern that they would not be able to adjust the sugar prices as the unrefined sugar prices have been rising up every day.

The sugar available at the market at this moment has been imported at about $470 per tonne. However, today the raw sugar price is about $540 per tonne.

If the raw sugar prices do not increase further, millers will be able to maintain current prices and if it goes down, prices may drop by Tk6 at retail level.

According to sources, the price of sugar is constantly increasing due to the increase in the price of unrefined sugar in the international market.

At the same time, due to dollar shortage sugar importers have faced challenges to open new LCs. Dollar exchange rates have also pushed up their import cost while gas shortage has been hampering sugar refining at local mills.

Earlier the government set the price of sugar at Tk112 per kg (packaged) and Tk107 per kg (loose).

But with a crisis of packaged sugar in the market, loose sugar is selling at Tk120-125 per kg.

According to the commerce ministry, Bangladesh's annual demand for sugar is 18-20 lakh tonnes, whereas the country locally produces only 30,000 tonnes.

However, the demand for sugar is 1.5 lakh tonnes per month, which doubles in Ramadan.

The import of sugar during the July-December period of 2022 decreased by about 2.08 lakh tonnes compared to the same period in 2021, according to commerce ministry sources.