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Sugar’s duty cut yet to bring any benefit to retail market
MOHAMMAD SUMAN and SUKANTA HALDER
Consumers in Bangladesh are still paying higher prices for sugar although a week has passed since the National Board of Revenue (NBR) removed the import duty on both raw and refined sweetener.
On February 26, the customs authority withdrew Tk 3,000 specific duty on the import of a tonne of raw sugar and Tk 6,000 on refined sugar with immediate effect. It also cut the regulatory duty to 25 per cent from 30 per cent.
But consumers, who are already struggling to make ends meet owing to the cost-of-living crisis, are yet to receive some respite from the high price of sugar, one of the key commodities used for preparing sweetened items, tea, biscuits, and confectionery.
Loose sugar has been retailed at Tk 115 to Tk 120 per kilogramme over the last two months while packaged sugar is hardly available in the kitchen market in the two largest cities of the country: Dhaka and Chattogram. Price data of the state-run Trading Corporation of Bangladesh also showed a similar price trend.
The government fixed the prices of loose and packaged sugar at Tk 107 and Tk 112 per kg, respectively, on February 1.
Yesterday, Nurul Alam Shikdar, a retailer in the Pallabi extension area of the capital, said he was selling loose sugar at Tk 120 per kg as he had not received sugar from the dealer since the reduction of the import duty.
Yusuf Ali, another retailer in Karwan Bazar, one of the biggest kitchen markets in Dhaka, was selling the item at Tk 115 per kg.
“Buyers are not buying sugar at Tk 120. So, I have cut the price.”
Most of the retailers in Karwan Bazar claimed that they are getting half the sugar they have sought from dealers. Retailers in the port city have also made similar observations.
The price of a 50-kg sugar sack, however, has dropped by Tk 40 to Tk 50 in the wholesale market in the past one week.
Sugar was sold at Tk 3,950 per maund yesterday from Tk 4,000 earlier, according to Abul Hashem, a wholesaler at Moulvibazar in Old Dhaka in the capital.
He also claimed that he was not getting 30-40 per cent of the sweetener he had ordered.
Taslim Shahriar, senior assistant general manager at the Meghna Group of Industries, one of the country’s biggest commodity importers and processors, claimed dealers and wholesalers were now buying less sugar due to the losses they incurred earlier.
He said: “The sugar that we currently have has been imported by paying customs duty at the previously fixed rate. It will take some time for the new sugar to hit the market.”
He hopes that the price of the product will go down by the end of this week.
Shahriar pointed out that the price of sugar in the international market was becoming unstable again.
“Sugar production in India starts in October and in Brazil from March. The prices of Brazilian sugar are going up every day. It will have an impact on the price level in Bangladesh.”
More than two dozen mills in India’s top sugar-producing state of Maharashtra had stopped cane crushing by the end of February, nearly two months earlier than last year, due to adverse weather, according to Reuters.
“The duty must be zero. Otherwise, there will be no major impact on the price in the market,” said Golam Mostafa, chairman of Deshbandhu Group, which operates a sugar refinery.
SM Nazar Hossain, vice-president of the Consumers’ Association Bangladesh, said the gas crisis, the volatility in the international market and higher import duty-refiners are cited as the factors behind the price hike.
“Their problems never end. They don’t think of the consumer’s side fairly.”
“Only the companies will benefit if any duty exemption is given without beefing up market monitoring.”
Businesses imported 3.28 lakh tonnes of raw sugar worth Tk 1,632 crore and 13,925 tonnes of refined sugar worth Tk 87.11 crore from January to February, according to data from the NBR.
Importers paid Tk 953.49 crore for raw sugar and Tk 55.03 crore for refined sugar in the form of duties.
This means the import cost of raw sugar, including the import duty, is Tk 69.79 per kg and that of refined sugar cost is Tk 102.07.