The latest hike in import tariff of sugar, an essential commodity, might push up its price in the domestic market ahead of Ramadan, retailers have expressed the fear. But the customs authorities have ruled out any significant impact on retail prices.
Consumption of sugar goes up substantially in the month of holy Ramadan. At times, unscrupulous traders try to hike the price of the item during the month.
The National Board of Revenue (NBR), in a Statutory Regulatory Order (SRO), Sunday increased 'specific duty' on raw sugar by Tk 500 per tonne, and on refined sugar by Tk 1500 per tonne.
A senior customs official said the price of raw sugar may go up by Tk 0.50 per kilogramme (kg) with the hike in specific duty, which is not that significant.
He said the customs wing has raised the specific duty following proposals from the Ministry of Industries for salvaging the local sugar mills.
The local sugar mills are facing uneven competition due to availability of imported sugar at cheaper rates, he added.
"Local sugar mills have claimed that they have some 0.2 million tonnes of unsold sugar during the last one and half years," the customs official said.
Biswajit Saha, general manager of City Group of Industries, said there would be no impact of the duty-hike on sugar prices immediately as the importers have the product in stock which they released from the customs under the previous tax structure.
He also echoed the same view on nominal increase in sugar price in the local market after importing fresh consignments of sugar under the revised duty structure.
"In the SRO the NBR has revised the tariff or base-price of sugar to US$ 510 per tonne for assessment at the customs points. But the importers are now bringing in the product at $425 per tonne, in accordance with the international price," Mr Saha said.
The NBR has increased the import duty by 1.25 per cent on that tariff value, he added.
Responding to a query on purchase of local sugar, Mr Saha said they are ready to purchase the local sugar in bulk, but local industries are now selling sugar through their distributors.
Consumers Association of Bangladesh (CAB) president Kazi Faruk said the government should conduct a review before imposing duty on the essential item ahead of Ramadan, that will begin from end of June next.
He said the consumers should get the essential item at fair price.
"The businesses hardly reduce the price with the cut in duty, but raise it following a duty-hike of essentials," he added.
It is the failure of the government's department concerned if businesses do not follow their directives, Mr Faruk added.
In 2012-13, some 15 state-run sugar mills under Bangladesh Sugar and Food Industries Corporation (BSFIC) incurred a loss worth about Tk 2.89 billion. According to Economic Survey 2013, loss of he state-run sugar mills shot up by about 130 per cent during the last four fiscal years (FY).
Sugar consumed in the country comes mainly from three sources-the state owned mills, the private refineries and import.
The private sugar refineries import raw sugar, process and sell it in the local market.
According to BSFIC, the 15 state-run mills have the capacity to produce 2.1 million tonnes of sugar a year against the country's demand of about 1.4 million tonnes.
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