Sugar refiners in Bangladesh have called on the government to take necessary steps to adjust the price of the commodity as the rapid depreciation of the taka against the US dollar sends import bills soaring.
In a letter addressed to the secretary of the commerce ministry on Wednesday, the Bangladesh Sugar Refiners Association also requested the government to waive the import duty and inject dollars at the existing interbank rate for import payments following a “30-taka devaluation of the domestic currency".
The millers, however, did not give any indication of what the new prices should be.
In September 2021, the government fixed the price of unpacked sugar at Tk 74 a kg while the rate for packed ones was set at Tk 75 per kg.
Despite several attempts, bdnews24.com could not reach Tapan Kanti Ghosh, senior secretary of the ministry, for comment. The ministry’s Additional Secretary AKM Ali Ahad Khan, however, said it has yet to receive any letter from importers.
According to data published by the Trading Corporation of Bangladesh on Friday, the price of unpacked sugar in the market has increased by at least Tk 3 per kg in the last two days. Data shows unpacked sugar, which cost between Tk 80-Tk 82 per kg last week, was now being sold for Tk 82-Tk 85 per kg.
Golam Rahman, secretary general of the sugar traders association, said importers have been asking for the hike as they are being forced to settle letters of credit, which were opened with deferred payment facility, with additional taka as the dollar prices went up after the LCs were opened.
"When the LCs were opened, the dollar rate was around Tk 83-85. But now, to settle those LCs, commercial banks are charging us Tk 115. We are haemorrhaging money for sugar imports right now," he said.
"We have informed the ministry that if the government activates the old system of price adjustment, you will see what the retail price of sugar should be right now. That discussion needs to be started immediately.”
The letter also noted that the import duty on sugar was previously Tk 22,000-Tk 23,000 per tonne. But due to the increased dollar rate, refiners are now paying Tk 28,000-29,000 in import duty. In addition, sugar importers have to pay duties, taxes and VAT at various stages, taking the tax incidence on sugar imports to as high as 51 percent.
After refinement, the mill gate price of each maund (approximately 40kg) of sugar stands at Tk 3,703-Tk 3,888, but refiners are selling it for Tk 2,900-Tk 2,920, according to the letter.
At this rate, Rahman said the price of sugar comes to Tk 85-86 at the mill gate.
“If the price is adjusted, it may exceed Tk 100 soon,” he said.
The annual demand for sugar in Bangladesh is about 1.8 million tonnes, according to the latest figures released by the ministry.
Government-owned sugar mills produce around 45,000 tonnes, while the rest is imported in the form of raw sugar.
Last week, cooking oil importers and refiners asked the Bangladesh Trade and Tariff Commission to consider their plan to raise the price by another Tk 20 per litre, citing the soaring dollar price.