State intervention fails to stabilise sugar prices

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BNP acting secretary general Mirza Fakhrul Islam Alamgir speaking at a discussion at the National Press Club in the city Tuesday organised by 'Nineties Student Leaders'. — Focus Bangla Photo

Monira Munni
The government's attempts to rein in prices of grocery items especially retail price of sugar appear to have fallen flat as the essential food item shows no sign of cooling off.
Industries Minister Dilip Barua said the prices of sugar will be fixed at mill-gate and wholesale and retail levels in a few days to keep the rate from further rocketting.
Sugar price shot up by 9.30 per cent in a month and 20 per cent per kg a year, according to the data by Trading Corporation of Bangladesh.
Traders said sugar was selling at Tk. 48-50 per kg at the groceries in the capital.
"We plan to cut the mill-gate price at least by two taka ahead of the holy month of Ramadan," the minister told the FE Saturday.
Mr. Barua said price of per kg sugar would be fixed between Tk.40 and Tk. 45 at the mill gate of state-owned sugar mills so that retailers find pretext to drive the prices up.
The new thinking comes after Bangladesh Sugar Refiners Association (BSRA) recommended setting the mills level sugar price at Tk. 45, the year-ago rate.
But refiners have opposed the government's unilateral intervention in price stabilisation, saying the market should rather determine the prices, supported by a good distribution system.
A refiner said a coordination committee may fix time to time factory price, distributor's price and retail price of sugar on the basis of average price of raw sugar.
"The committee can also monitor the nationwide distribution system to streamline the supply chain," he said.
Officials said the government wants to build a buffer stock of 100,000 tonnes through domestic and international procurement to meet additional demand and keep the price stable during Ramadan.
An official at Bangladesh Sugar and Food Industries Corporation (BSFIC) said the state-run agency will procure 50,000 tonnes of sugar to help keep the price stable and curtail traders' scope to spawn "artificial crisis" in the name of supply crunch.
The corporation will intensify its local procurement drive in the same fashion and officials say it will buy another 10,000 tonnes of sugar locally, he said. Currently the government has a stock of 40,000 tonnes of sugar.
Bangladesh depends much on imported sugar to meet its annual demand of 1.4 million tonnes but that almost doubles during the Ramadan, according to traders.