Sugar rises Tk200 per maund in Khatunganj amid supply squeeze
Sugar now sells at Tk3,800 per maund in Khatunganj
Highlights:
- Wholesale sugar prices in Chattogram rose Tk200 per maund
- Gas and power shortages have reduced local sugar production
- Traders fear further supply shortages could push prices higher
- Some traders allege mills are creating artificial shortages
- S Alam's factory shutdowns have further tightened sugar supplies
- Consumers fear wholesale increases will eventually raise retail prices
Sugar prices in Chattogram's wholesale market have risen by as much as Tk200 per maund in two weeks as traders report tighter supplies amid gas and power shortages.
Sugar that sold for Tk3,600 per maund (37.32kg) two weeks ago is now selling for Tk3,800 in Khatunganj.
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Traders fear prices could rise further unless the supply situation improves.
Market insiders questioned the domestic price rise, saying international sugar booking rates have not increased significantly. A section of traders alleged that mills were creating an artificial shortage to push up prices through syndicates as in the past.
Md Mohiuddin, general secretary of the Chaktai-Khatunganj Aratdar General Traders' Welfare Association, however, rejected the syndicate allegation.
"Commodity markets are never stable. Sometimes booking prices rise, while at other times supply falls. Whenever the price of a commodity rises, allegations of syndication emerge, but no such questions are raised when prices fall," he told TBS.
He said commodity prices fluctuate based on demand and supply, adding that there was no scope to raise prices through a syndicate.
Production falls, supply tightens
Traders said gas shortages have cut production at several Chattogram factories, with some suspending operations, tightening supply to the wholesale market.
Many factories are now supplying sugar from existing stocks, traders said. But with fresh production falling, those stocks are being depleted quickly, raising fears that supplies could tighten further.
City Group, one of the country's major sugar refiners, was contacted for comment. Its Director Biswajit Saha did not answer calls or respond to a WhatsApp message despite repeated attempts.
S Alam Group once supplied a significant share of sugar to the Chattogram market, according to traders.
Earlier this month, the group said it had temporarily suspended production at 11 factories in Chattogram, citing restrictions on banking facilities and accounts and difficulties in opening letters of credit, which it said had caused raw material shortages.
Traders said the suspension of S Alam's sugar production is also contributing to the supply shortage in Chattogram.
The market is now mainly receiving sugar from Dhaka-based companies. Traders said the additional cost of transporting sugar from Dhaka is also affecting wholesale prices.
Syndicate concerns resurface
A section of traders said mill owners' control over the market weakened for several months after sugar imports were opened during the interim government.
They alleged that mills later sold sugar at lower prices, causing losses to small and medium importers. After many importers left the market, control again shifted to large mill owners, they claimed.
SM Nazer Hossain, central vice-president of the Consumers Association of Bangladesh (CAB), said the problems in the sugar market were nothing new.
"Only a handful of industrial groups are involved in sugar refining and marketing in the country. The government could bring the market under control by monitoring these companies, but that is not happening," he told TBS.
He said traders were able to move sugar prices as they wished because of weak administrative oversight, which had made them more reckless.
Market monitoring under scrutiny
Consumers complained that authorities have carried out few drives despite rising sugar prices. They called for authorities to examine the reasons behind the increase and regularly monitor supply and prices from mills to the wholesale market.
Mohammad Faiz Ullah, deputy director of the Directorate of National Consumer Rights Protection in Chattogram, said regular market monitoring is continuing.
"We have not yet received information about the rise in sugar prices. Even if wholesale prices have increased, the impact may be felt at the retail level later," he said.
He added that the authority would look into the matter and take action.
Market participants fear the rise in wholesale sugar prices could eventually affect the retail market. If production does not improve amid gas and power shortages, they fear supplies could tighten further, putting more pressure on consumers.
