Sugar still above govt-fixed rate despite hike
Sugar was sold for Tk130-Tk140 on Friday, which was 68% more than last year
Retail sugar prices in the country's kitchen markets remain higher than the rate set by the government despite a hike in the rate recently.
On Thursday, the Ministry of Commerce increased the price of sugar by Tk16 per kilogram, causing loose sugar prices to jump to Tk120 a kg and packaged to Tk 125.
However, traders were seen selling sugar Tk10-Tk15 higher than the fixed rate at various markets in Dhaka and Chattogram till Friday.
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According to the market regulator Trading Corporation of Bangladesh (TCB), packaged and loose sugar was sold for Tk130-Tk140 on Friday, which was 68% more than last year.
Traders in the capital's Karwan Bazar said that after the new price, the sugar supply is less than the demand. On the other hand, loose sugar has to be procured at a higher price from warehouses.
Therefore, they are not buying sugar from warehouses.
Ali Hossain, a salesperson at Yasin General Store in Karwan Bazar, said, "We had ordered packaged sugar before Eid and the company supplied us with 40kg just today. We bought this for Tk124 and are selling it for Tk125."
Mohammad Sujan, a seller at Yusuf Store in Karwan Bazar, said, "The supply of sugar has not returned to normal yet and the companies are just starting to supply with the new price."
What importers and traders say
Sugar importers and traders said the total cost of sugar comes to Tk90 per kg after adding regulatory duty of 25%, VAT of 15%, and transportation and refining costs.
As such, sugar is expected to be sold at a maximum of Tk100 per kg in the retail market.
However, since the end of Ramadan, sugar is being sold at Tk130-Tk140.
According to the bill of entry, the cost of sugar imports was paid at an exchange rate between Tk106 and Tk107 per dollar. The maximum booking price was Tk57 per kg with the addition of Tk22 for regulatory duty and VAT and Tk7 for transportation and refining costs.
This means that the maximum price of existing sugar stock in mills is Tk86.
Alamgir Parvez, a wholesale sugar trader in Khatunganj, said that according to the international booking rate, sugar should be sold at Tk 95 per kg at the wholesale level and at a maximum of Tk 100 at the retail level.
SM Nazer Hossain, vice president of the Consumer Association of Bangladesh (CAB), said that there is a considerable difference between the current booking price of sugar in the international market and the selling price. "The government needs to monitor this issue."
In September last year, the government started fixing the price of sugar in the market.
During this period, the price of sugar was fixed five times, which was never reflected in the markets.
On 6 April, the government announced the maximum retail price of loose sugar at Tk104 per kg and packaged sugar at Tk109.
On 11 May, prices were increased to Tk120 for loose sugar and Tk125 for packaged ones.
According to the Ministry of Commerce, the annual demand for sugar in the country is 18-20 lakh tonnes, compared to that, only 30,000 tonnes are produced locally.
In global context
Bangladesh has pricier sugar than most of its South Asian neighbours, including Pakistan and Sri Lanka – both facing inflation of over 35%.
The GlobalProductPrices website which tracks retail prices around the world puts Bangladesh at 62nd place in its index for sugar prices among 81 countries, meaning sugar in 61 countries is pricier than in Bangladesh.
If converted in US dollars, sugar prices stood at $1.04 per kg in Bangladesh, which was $0.85 in Sri Lanka, $0.55 in India and $0.65 in Thailand. Pakistan has the second lowest price at $0.39.
The average price in the list is $1.43, with Hong Kong having the highest at $3.18 and the lowest price in Turkey at $0.26.
