Supply crisis fuels sugar price

Refiners ‘struggling to meet production targets due to gas shortages at plants’

The Bangladesh Sugar and Food Industries Corporation currently has 44,000 tonnes of sugar in stock which can be supplied to markets through dealers and open sales, an official said. Photo: star/file

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The Bangladesh Sugar and Food Industries Corporation currently has 44,000 tonnes of sugar in stock which can be supplied to markets through dealers and open sales, an official said. Photo: star/file

Sugar prices rose again in Dhaka and Chattogram amid supply shortages.

Owners of private mills have said imports are normal, but they see no way out of the price spiral as there is not enough gas supply to refine the sugar.

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They added that a shortage of dollars and the complexity of opening letters of credit (LC) could lead to import shortages in the future.

The government raised sugar prices in the first week of October in an apparent attempt to catch up with the market, as traders were already selling it at higher rates than previously set prices.

According to the new government tariffs, bulk sugar is expected to cost Tk 90 per kg and packaged sugar Tk 95 per kg in the retail market.

But bulk sugar is currently being sold at Tk 100-110 per kg in the retail market, while packaged sugar is currently hard to find.

The increase of 10 to 15 Tk in the price of sugar per kg has increased the difficulties of consumers who are already struggling to cope with the soaring prices of basic necessities.

Retailers and wholesalers in several districts of Dhaka said the supply of bulk sugar is down and the packaged variety is not available everywhere.

A trader in Moulvibazar, a wholesale market in Old Dhaka, said: “For a week we have not been getting sugar from the mills as per demand. So the price has gone up. It is not possible to sell sugar. at the price set by the government.

Monwar Hossain, owner of the Yasin general store in the capital’s Karwan Bazaar, said the situation is such that the price of sugar will rise further.

Traders at the Khatunganj-Chaktai wholesale market in Chattogram said sugar prices had risen from Tk 450 to Tk 500 per maund (37.32 kg) in the local market in a month.

According to traders, sugar is now being sold at Tk 3,480-3,500 per maund, compared to Tk 3,000-3,050 a month ago.

Sugar prices have risen 19.5% over the past year, according to the Trading Corporation of Bangladesh, although international media have reported that freight costs for imports have almost halved.

Biswajit Saha, Director of Corporate and Regulatory Affairs at City Group, said, “Before, we could supply 3,000 tons of sugar per day. Now it’s 700-800 tons.”

According to him, the import is normal but the production has dropped considerably due to the reduction in the supply of gas to the refining units. If the gas problem is not resolved, the sugar supply will not return to normal.

There are many complications in opening the LCs and the taka has weakened, he said, fearing sugar imports will fall in the future.

Taslim Shahriar, Senior Deputy Managing Director of Meghna Group of Industries, said their production has dropped by 60% due to the gas crisis. If the crisis is not resolved, there will be many problems in the sugar market.

The Bangladesh Sugar Refiners Association said it was getting no solution even after informing the government.

Factory owners said the country’s annual sugar demand is 25 lakh tonnes. Domestic sugar mills can produce up to 1 lakh tons. The rest of the sugar comes from abroad.

According to National Board of Revenue (NBR) data, 90-95% of imported sugar is unrefined.

Factory owners import unrefined sugar from Brazil, India, Australia, the UK and Malaysia, before refining it and supplying it to the market.

NBR data showed that about 7.40 lakh tonnes of sugar worth Tk 4,045 crore – including customs duties, VAT and taxes – were imported in the first three months and half of this financial year, until October 20.

The Directorate of National Consumer Rights Protection (DNCRP) will today carry out a nationwide campaign at refineries to verify allegations of lack of adequate gas supply, a senior DNRCP official told the Daily Star. .

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