Sugar import duty halved to cushion consumers

The National Board of Revenue (NBR) has halved import duties on raw and refined sugar to ease the burden on consumers amid a rising cost of living. However, businesses say the move will have little impact on the price.

Effective immediately, importers will pay Tk1,500 per tonne of raw sugar, down from Tk3,000, and Tk3,000 per tonne of refined sugar, down from Tk6,000.

The revised tariff will remain effective until 31 March 2024, according to a circular issued on Wednesday by the NBR.

Sugar refining and marketing executives say the reduction in import duty will have a negligible impact on price, as other costs, such as importing, refining, and marketing, remain unchanged.

For each tonne of sugar imported, the duty will be reduced by Tk1,500, which translates to a cost reduction of Tk1.5 per kg. However, international sugar prices are rising, so the executives believe that domestic prices may increase rather than decrease in the coming days.

Taslim Shahriar, deputy general manager of Meghna Group, told The Business Standard that the duty reduction will lower the price per kg by up to Tk1.5.

According to data from the Trading Corporation of Bangladesh (TCB), sugar was sold at Tk130 to Tk135 per kg in the capital's markets on Wednesday, which is 20.45% higher than the same period last year.

The country has an annual demand of about 20 lakh tonnes of sugar. This essential product is entirely import-dependent. Several companies, including City Group, Meghna Group, Bashundhara Group, TK Group, S Alam Group, and Deshbandhu Group, import and market raw sugar from Brazil, Argentina, and India.

Most of the sugar demand is used in various industrial sectors, with a major share going to pharmaceuticals, bakeries, sweets, confectionery products, and particularly the ice cream sector.

In addition to private sector companies, the state-owned TCB procures sugar through local and international tenders and supplies 2kg per month to one crore families at affordable prices.

However, market analysts believe that TCB's supply is not contributing to the control of the product's price. The sugar market in the country has been unstable for an extended period. Price fluctuations occur due to factors such as a high dollar exchange rate, increases in international market prices, and rising transportation costs.

Despite government initiatives to manage prices, such as reducing duties, expediting port clearance, and facilitating margin-free import letters of credit, the public does not seem to reap the benefits, they added.