“Only six companies control the market, so we didn’t want to take any action that interrupted sugar supply,” the consumer rights regulator chief said
Published : 15 Jul 2023, 12:01 AM
Despite tough-sounding statements from Commerce Minister Tipu Munshi, the government has taken no notable action on sales of sugar at exorbitant prices, leaving consumers with a bitter taste.
The Tariff Commission has calculated that sugar mill owners are making a profit of at least Tk 15 more than the regulated level at current prices.
The prices of sugar at markets are also higher than the new price set by the government.
The Directorate of National Consumer Rights Protection (DNCRP) believes sugar will 'disappear' from the market if they get tough. So, instead, they do nothing.
On Jun 19, the Sugar Refiners Association, an organisation of sugar mill owners, sent a letter to the commerce secretary to inform him about the price increase of Tk 25 per kg.
On Jun 22, when the new price was to take effect, Commerce Minister Tipu Munshi said they would not approve the proposal but would decide on the new price after Eid.
The commerce minister said that efforts are being made to reduce sugar VAT and other tariffs, but the government has shown no initiative in this regard either.
In the two weeks since Eid, there is no news of a new government meeting on the issue. Still, consumers are spending more at markets as sellers ignored the minister and imposed the higher price before Eid.
On Friday, sugar was available at Karwan Bazar, one of Dhaka's wholesale markets, at Tk 135 per kg. But in Hatirpool, just one kilometre away, grocers were reluctant to sell at even Tk 150 per kg.
On May 10, Commerce Secretary Tapan Kanti Ghosh, on behalf of the Ministry of Commerce, announced the price of unpacketed sugar at Tk 120 per kg and the price of packeted sugar at Tk 125. However, weeks before that announcement, sugar was already being sold at Tk 140 per kg.
The commerce minister had said that if the price rose without their approval, the matter would be investigated by the DNCRP.
Asked what the department is doing about the issue, Director General AHM Shafiquzzaman told bdnews24.com, "For the past six months, there have been various problems in the sugar supply chain, from the dollar crisis to rising prices in the international market and many other issues. Some traders may be taking advantage of this.”
Shafiquzzaman said, "In this case, we are taking action if we find any irregularities in the market. “Only six companies control the market, so we didn’t want to take any action that interrupted sugar supply.”
Commerce Secretary Tapan Kanti Ghosh was called to inquire about the government's position on the sugar market situation, but he did not pick up.
An official of the Ministry of Commerce said that in the calculations sent to them by the Tariff Commission the price declared by the sugar mill owners is Tk 15 taka higher than the proper rate.
An official from the directorate was asked why they are not taking action if this was not the case. The official, who requested anonymity, said he did not know.
Commerce Minister Munshi was called to ask about the situation in the sugar market, but he did not pick up.
But recently he said in Parliament that action can be taken 'against syndicates', but these measures cannot always be implemented because they must 'consider the suffering of the people'.
On Jun 28, he said, “Syndicates are often discussed in the market. It is true that large groups do a lot of business together. We need to focus – we can send offenders to jail or fine them. That may be possible.
"But it will suddenly create a crisis, one that will be difficult for us to bear. That's why we try, through discussions, to get them to follow the rules."
Recently, at a ministry event, in response to the questions of the journalists, the commerce minister said, "I have experienced the [high] price of sugar myself. … Admittedly, implementation of our initiatives is often slow.”
Abdul Hannan, spokesman for the Consumers Association of Bangladesh (CAB) and former editor of consumer rights publication Voktakantho, feels that the sugar market has been handed over to six big refineries, who have taken over the entire market in the name of refining imported unrefined sugar.
“The industry is now completely out of the government's control. In this situation, the checks and balances that must be present are not there. Again, the Competition Commission is failing to do what is necessary to ensure competition. Because of this, the government is deprived of the chance to intervene in the sugar market.”
Claiming that the prices of cooking oil and sugar are not fixed properly, he said, “What action is taken actually helps the refiners to control the market and earn extra profit. According to the Tariff Commission Act, refiners are supposed to submit their import price and the price at which they intend to sell to the Tariff Commission separately. The commission is supposed to analyse their proposals and approve individual prices based on the import costs of the companies concerned.”
“But now the association sends in a joint proposal. The government then decides on that proposal. Time and time again, on behalf of consumers, we’ve said that this just allows companies to make extra profit. Each company's import cost is different. By facilitating this, the government is indirectly creating syndicates.”
Deshbandhu Group Managing Director Golam Rahman and City Group Director Biswajit Saha were contacted to discuss the complaints against refiners in the sugar market, but they could not be reached.
PRICES VARY FROM STORE TO STORE
The price of sugar is Tk 150 per kg at the Zaker Store in the Hatirpool wet market. However, Abul Khair was selling it for 135 taka per kg at Farooq Store, a grocery store in the Karwan Bazar Kitchen Market.
In the morning, trader Abu Zaher got into an argument about the price with Rimon Ahmed, a customer at the Zaker Store.
Rimon commented, "He is asking for Tk 200 for a litre of oil. And he says the price of sugar is Tk 150 taka, that too for unpacketed sugar. If all the prices just keep going up, where are we going to go?”
Eventually, Abu Zaher sold a litre of Tir soybean oil for Tk 190, but did not discount the price of sugar.
The shopkeeper said, "We got 50 kg of unopened sugar from Karwan Bazar yesterday after a long time and packeted it. We cannot sell for less than Tk 150. My store wasn’t able to sell sugar for the past week. When customers came by, I got it for them from other shops. When I wasn’t able to sell it to them, they turned away. Now we only have unpacketed sugar."
Abul Khair, a shopkeeper of Farooq Store in the same market, said, "I didn’t have sugar for many days. But I had everything else.”
Mamun Hossain, a shopkeeper at Karwan Bazar's Kitchen Market, said, "We sell unpacketed for Tk 135 and buy for Tk 130."
He said, "We can get it directly from the dealers. But we need at least Tk 50 to 60 in rickshaw fare. And when we sell 250 gram or 500 gram packets the price goes up.”
But some shopkeepers in the market are keeping the same prices as neighbourhood shops.
Another trader named Shah Paran said, “Unpacketed and packaged sugar are both Tk 150. I can go as low as Tk 140 for unpacketed sugar. I buy it at a rate of Tk 137.”
[Writing in English by Shoumik Hassin]