Prices of crystal sugar shoot up

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FE Report
Prices of crystal sugar shot up by around 25 per cent in local markets in recent days, which refiners blamed for unusual price hike of raw sugar in international market.
The prices of sugar now range between Tk 49 and Tk 50 a kilogramme (kg), which was Tk 40 earlier.
"We've nothing to do. Higher international prices are forcing us to raise the prices of finished sugar," said Md Golam Mustafa, secretary general of Bangladesh Sugar Refiners Association (BSRA), a group of seven refiners.
The prices of raw sugar have been increasing over the past few weeks in the international market as the bad weather in Brazil and India, the world's two largest producers, has affected crops and pushed up prices skyward.
Currently, the prices of raw sugar in international market now range between US$ 560 and $ 570 a tonne, which traders say the highest in recent years. The price includes freight and premium as well.
Bangladesh's local sugar mills refine raw sugar and they dominate the market of around 1.2 million tonnes a year. The state-owned sugar mills produce over 100,000 tonnes sugar using local sugarcane.
Golam Mustafa, who is also chairman of Desbandhu Sugar Refinery, told the FE: "The sugar prices in international market are rising everyday."
However, local refiners urged the government to withdraw of import duty on the raw sugar to keep the prices stable.
"We think the government should immediately take measures to withdraw the duty on raw sugar import to keep prices of the essential stable in the local market," one senior official at City Group of Industries, a leading sugar refiner.
Sources at the BSRA said they had already sent letters to the Prime Minister's Office, commerce ministry and industries ministry on August 8 asking to withdraw duty on raw sugar
Import duty on raw sugar is Tk 4,000 per tonne.
Local refiners bring in raw sugar mainly from Brazil and also import some quantity from Thailand and elsewhere.
The private sector refiners pointed out that opening of the fresh letters of credit for raw sugar imports were almost stopped in the past couple of weeks due to the steep rise in global prices.
BSRA officials argued that zero duty may lure refiners into booking advance orders for coming months.
The government earlier instructed state-owned Bangladesh Sugar and Food Industries Corporation (BSFIC) to import 150,000 tonnes of finished sugar to stablise the local market.
Sources at the BSFIC said it is yet to procure sugar and the state-owned organisation is making procedures to import, which local traders say that the move will not bring any positive impact following volatility in international market.
Delwar Hossain, a leader of Bangladesh Sugar Merchants Association, said wholesale sugar market remained shaky and local supply could be hampered when local refineries would run out of their stocks.
Taherul Haque, a leading commodity broker said: "Sugar price has really become unpredictable now."
Projected shortfall in production in Brazil due to wet weather has led to global sugar market volatility.
While poor output in India, the world's second largest sugar producer, due to drought has further worsened the situation, according to a report published in the Financial Times (FT).
According to media reports, at least two months back the Indian government had withdrawn entire duty on sugar imports to help build a safe stock as sugar price doubled to 37 rupees per kg in one year in India.
Sugar is retailed at 50 rupees a kilogramme in Pakistan, according to media report.