Govt cuts markup on sugar, edible oil trade

The government has slashed the allowable profit margins at the production, wholesale (distributor) and retail levels of edible oil and sugar apparently to give some relief to the consumers battered by the skyrocketing prices of essentials.
The edible oil and sugar producers are now entitled to keep a maximum markup of 1.0 per cent on their products against the previous level of 2.0 per cent, according to an official document obtained by the FE.
With the move, the wholesalers and retailers will be able to make a maximum profit of not more than Tk 8.0 per one-litre bottle and Tk 35 per five-litre bottle of edible oil.
The profit margin has been reduced by Tk 5.0 per kg of sugar at the wholesale and retail levels, according to the document.
Earlier, it (profit margin) was 2.0 per cent - Tk 45 per five-litre bottle of edible oil and Tk 10 per one-litre bottle - at the production, wholesale and retail levels.
The markup was Tk 6.0 per kg on the sweetener at the wholesale and retail levels.
"The government has re-fixed the net profit margins at the producer, wholesaler and retailer levels so that consumers feel comfort while buying such commodities from the market," a senior official said.
He, however, said that the margin was set through discussion with the country's refiners concerned. The profit has been reduced taking into consideration all kinds of issues, including A-Z expenses of the producers, wholesalers and retailers.
He claimed that the edible oil and sugar producers from now on would be able to earn 1.0 per cent profit after adjusting all kinds of their costs including duty, VAT, process loss, etc.
On the other hand, distributors and retailers can charge Tk 35 on a five-litre jar and Tk 8.0 on a one-litre bottle as profit, he added.
The government has taken different steps to tackle the prices of key essential items, but there is hardly any impact on the market, said a concerned source.
Currently, sugar has become both scarce and expensive in the local market in recent days. Sugar was still selling at Tk 100-120 in the kitchen market although the government set the price of packed sugar at Tk 95 per kg and loose Tk 90 per kg.
The central bank and the consumer rights protection agency on Sunday last assured the citizens of making the item available in the market soon.
At a meeting with the Directorate of National Consumer Rights Protection (DNCRP) on Monday, the sugar refiners assured that the problem of supply shortage in the market will end soon.
They, however, urged the government to provide uninterrupted gas supply with adequate pressure to the refineries.
The DNCRP has already inspected the sugar refineries against the backdrop of the crisis in the country.

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