Govt, refiners at odds over unrefined sugar stock

Infographic: TBS

The government claims sufficient stock of unrefined sugar in the country but refiners say a lesser amount of the item has been imported this year compared to the demand.

Currently, 52,000 tonnes are waiting to be released at the Chattogram port and there is no more sugar at the import level. As a result, refiners fear a shortage of sugar in the country.

However, the Bangladesh Bank said the sugar import has increased this year compared to last year. 

Another one lakh tonnes of sugar will be imported soon, the central bank continued, as a result, there is no reason for sugar shortage in the market and the crisis will be solved only if the monitoring is strengthened.

There has been a supply shortage of sugar in the market for a few days which has driven up its price. The sugar price has increased by Tk20 to Tk110 from the government-fixed price of Tk90 per kg, amid claims of reduced production due to the gas crisis.

Meanwhile, the Bangladesh Sugar Refiners Association is looking for an opportunity to increase the sugar price. The association claims that refiners' costs have gone up due to an increase in the expenses in various segments such as the import of unrefined sugar. The import of unrefined sugar has also decreased.

The association in a letter to the commerce ministry said Bangladesh imports 27-28 tonnes of unrefined sugar every year. This year so far the import has been just 18 lakh tonnes compared to 25 lakh tonnes and 27 lakh tonnes last year and the year before.

According to the Bangladesh Trade and Tariff Commission, the country has an annual sugar demand of 18 lakh tonnes, of which more than 98% is met with imports. Around 50% of sugar is consumed by food manufacturing companies.

The letter – signed by Secretary General of Sugar Refiners Association Golam Rahman – claimed that due to the appreciation of the greenback, companies have to settle their import payments at Tk105 per dollar for the letters of credit (LCs) they had opened at a rate of Tk96-98. Due to the rise in costs, the import duty, which was Tk22,000-23,000, now stands at Tk3,1500-3,2000.

As a result, the mill gate price of each tonne of sugar stands at Tk1 lakh to Tk1.05 lakh. That is, the cost per maund stands at Tk3,703-3,888 against the current mill gate rate of Tk3,150.

AHM Shafiquzzaman, director general of the Directorate of National Consumer Rights Protection, said, "Due to gas shortage, sugar production has decreased by 20-25%. But the refiners have stock of enough raw materials."

Taslim Shahriar, senior assistant general manager of Meghna Group of Industries, told TBS, "Due to reduced production of sugar caused by gas shortages, there is a supply shortage in the market."

Meanwhile, the association claimed that currently there is one ship of unrefined sugar at the Chattogram port and no ship is lined up to come to Bangladesh from Brazil, the exporting country of the essential commodity. India, an alternative country to import sugar, has also stopped exporting the item. If this situation continues, the association members fear that there is a possibility of a sugar shortage in Bangladesh.

In such a situation, the association has called for withdrawing all duties on sugar, allowing commercial banks to open LCs without any restrictions, ensuring the supply of dollars to settle import payments of sugar at the rate proposed by the Bangladesh Bank, arranging for the import of raw materials through 365 days of deferred payment and ensuring uninterrupted supply of gas in the interest of keeping factories running.

'Gas crisis to go'  

The gas supply to the areas where sugar refiners are located will be normal from Sunday and this crisis will be resolved soon as there is sufficient stock of raw material, said Director General of Consumer Rights Protection Directorate AHM Safiquzzaman.

At a discussion with the leaders of the Karwan Bazar Retail and Wholesale Traders Association of the capital on Sunday, he said they got this information during an inspection of five refineries.

"The demand for sugar is 18 lakh tonnes, which is almost entirely dependent on imports. Sufficient raw materials have been imported. If production can be maintained, there will be no problem. For this, the authorities concerned have been asked to ensure the supply of sufficient gas. They agreed," said AHM Safiquzzaman.

"If any traders think they need sugar and if they tell us we will arrange the supply of the commodity as much as they need from factories," he added.

On this occasion, City and Meghna group dealers blamed the refiners for the crisis in the sugar market. They blamed the insufficient supply of the essential commodity from factories for the crisis. Packaged sugar is not available at the distributor level. The sugar ordered in September has not yet been delivered.

Jamal Hossain, a dealer of Meghna Group, said he ordered 16 tonnes of packaged sugar but the company has not supplied it. In this regard, the company said the price of loose sugar has increased, due to which they have stopped the supply of the packaged sugar.

City Group distributor Md Omar Farooq said, "We ordered sugar in September. But the company is yet to deliver it. We are all hostage to the companies."

Similar allegations have been made against refiners run by TK, Abdul Monem and S Alam groups.

It should be noted that the government fixed the price of packaged sugar at Tk95 and loose sugar at Tk90 on 6 October. But packaged sugar is not available in the market for two or three days while loose sugar is selling at Tk110 per kg.

The director general of the consumer rights directorate said the price was fixed with the opinion of the refiners. But now they don't obey it. Delivery of sugar to dealers and wholesalers has been slow for several days.

"Now, going to the market to find the cause of the crisis, it is seen that many people are selling loose sugar by cutting packets," he added.