The Bangladesh Trade and Tariff Commission has suggested increasing the price of already-pricey sugar by Tk 15 per kilogram amid an overheated commodity market.
Sources said the state agency recently sent the recommendation to the commerce ministry in response to the sugar refiners' price-hike plea, citing bank-loan interest rates, rising dollar prices and refiners' production costs.
The commission recommended an increase in the maximum retail price (MRP) of packed sugar to Tk 140 per kg from its present rate of Tk 125, while the MRP of loose sugar is proposed to be Tk 135 from Tk 120 per kg.
It has also proposed the price of refined loose and packet sugar at Tk 130 per kg and Tk 135 per kg, respectively, at the mill gate. Besides, the prices of refined loose and packaged sugar are to be Tk 132 per kilo and Tk 137 at the distributor level.
The commission proposed the sugar prices by calculating the US Dollar's exchange rate at Tk 112, taking into consideration six months of bank loan interest and determining the prices based on average import prices inclusive of average LC, average in bond and out-bond from June 01 to June 30, 2023.
Contacted, a senior commerce ministry official said, "We received a suggestion paper regarding reviewing sugar prices from the tariff commission. But we did not take any decision so far."
On 8 May, the government reviewed rates of loose and packaged sugar and fixed those at Tk 120 per kg and Tk 125 per kg respectively as per the commission's recommendation.
Consumer rights activists said if the authorities raise sugar prices now, it will intensify the price woes of common consumers further.
Currently, sugar prices are much higher in the retail market, even though the government fixed the MRP of the essential to control the rocketing trend of the mass-consumed typical sweetener.
The item is at Tk 130-Tk 140 per kg in different retail markets in Dhaka city, according to the daily market prices data of the Trading Corporation of Bangladesh (TCB).
During the June 01 to June 30 period this year, raw (crude) sugar was at (simple average) US$ 599.86 per tonne in the international market, according to the tariff commission documents.
Currently, sugar has become both scarce and expensive. The government could not bring the price of sugar under control despite taking multiple steps. And some state agencies often meet with traders to take necessary steps to stabilise the prices of commodities, including sugar, a source said.
The annual demand for sugar in Bangladesh is around 22 million tonnes. Some 2.2-2.4 million tonnes of raw sugar is imported annually, according to the tariff commission.
On average, 0.11 million (1.1 lakh) tonnes of sugar are required per month. Only 1.5 per cent of the country's demand is met by locally produced sugar by sugarcane growers, leaving the sector import-dependent.
In early May 2023, the commerce ministry sent a letter to the National Board of Revenue (NBR) for continuing its reduced duty benefit for importing raw sugar as the price of the item has increased. The facility was supposed to end on May 31, 2023, a high official of the commerce ministry said.
Ahead of the last sacrificial festival, local refiners urged the government to jack up its price by Tk 25 per kilogram.
The Bangladesh Sugar Refiners Association (BSRA) moved the proposal to fix the maximum retail price (MRP) of packed sugar at Tk 150 per kg, from its present government-fixed price of Tk 125 per kg, and the MRP of loose sugar at Tk 140 per kg from Tk 120 per kg.
The association had wanted to make the rates effective from June 22, and it had requested the commerce ministry to take necessary steps in this regard.
However, the commerce ministry had held back the proposal to review the sugar prices before the Eid ul Azha festival.
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