Local sugar refiners have urged the government to keep the LC (letter of credit) margin at a lower level for sugar import to ensure its uninterrupted supply during the upcoming fasting month of Ramadan, sources said.
The Bangladesh Sugar Refiners Association (BSRA)--a platform representing five sugar producers in Bangladesh who altogether meet 98 per cent of the local demand - in a letter has proposed to take necessary steps for importing raw sugar at 10 per cent LC margin through the four state-run banks--Sonali, Janata, Agrani and Rupali.
The Association claimed that the private sector banks cannot open necessary LCs for sugar import despite paying required amount of money.
Earlier, they could open LCs for sugar import on bank-customer relation basis.
In 2024 (with only 2.5 months remaining in the current year), the amount of raw sugar imported is about 36 per cent less than in 2023 and about 51 per cent less than in 2022, according to the BSRA.
Lower volume of sugar has been imported in the current year due to reluctance to open LCs by the commercial banks because of dollar crisis.
Besides, the increase in the price of raw sugar on the international market, the war between Russia and Ukraine and the Palestine-Israel conflict have also had a negative impact on international trade, they said.
When contacted, Secretary General of BSRA Golam Rahman said, "We cannot open LCs for importing sugar. So, we have requested the government for a facility to import sugar at 10 per cent margin. We have also requested to address other problems in the sector."
He added the government should take necessary steps soon to import sufficient raw sugar aiming to meet the demand during the month of Ramadan.
Otherwise, the Association would not be responsible if any crisis of the sweetener occurs in the kitchen market.
A massive amount of sugar is required to meet the Ramadan demand across the country.
During the fasting month, the demand for sugar increases about 2.5 times compared to all other months of the year.
In view of the rising demand during Ramadan, it is essential to take proper measures now for the import of raw sugar to ensure adequate stock of the sweetener, reads the letter.
Raw sugar is imported to Bangladesh from Brazil, which is a time-consuming matter, taking at least 45 days.
Besides, sufficient time is required to refine and market the item.
"To meet the demand of sugar in the month of Ramadan, we have to take measures for its import from now; otherwise, it may be impossible to supply the required amount of sugar during the month of fasting and there is a fear of severe crisis of the item at that time in the market," Mr Rahman mentioned.
The association added importing a full ship of raw sugar (around 55,000 tonnes) requires about Tk5.0 billion (dollar equivalent).
Along with that, about Tk1.75 billion duty has to be paid for the release of such a huge amount of sugar. In total, Tk 6.75 billion has to be paid for one shipload of imported raw sugar to reach the factory.
Providing such a large amount of money in the current economic condition is also difficult and almost impossible for an importer, reads the letter.
The annual sugar demand of the country is estimated to be between 2.0 and 2.2 million tonnes.
To meet this demand, around 2.2-2.4 million tonnes of raw sugar is imported annually.
Currently, over 98 per cent of domestic sugar demand is met by private sugar mills while state-owned mills contribute only 1-2 per cent.
The BSRA proposal has been sent to the Bangladesh Trade and Tariff commission (BTTC) to give opinion.
In the last month, the National Board of Revenue (NBR) halved the existing regulatory duty on sugar imports, reducing it to 15 per cent from 30 per cent.
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