Govt decision on sugar refiners' pleas next week
Thursday, 13 May 2010
FE Report
The government will next week decide on the sugar refiners' pleas to lift exports ban and abolish controversial delivery order system, which is blamed for price manipulation in the market, officials said.
The country's top sugar refiners have already met with Finance Minister AMA Muhith and Commerce Minister Faruk Khan to urge them to allow export of excess sugar produced.
They have also urged the government to take legal steps against delivery order (DO) system - a practice widely blamed for creating scope for widespread price manipulation in the market.
"We have listened to all their proposals. We will sit with other stakeholders before we take any decision," said a senior commerce ministry official, preferring anonymity.
A decision on both the export and DO system issues will come out next week, the official added without elaborating.
The commerce ministry officials Tuesday also held talks with Trading Corporation of Bangladesh (TCB) - the government arm responsible for purchase and sale of essential commodities at fair prices - and an intelligence agency as part of its move to review the market situation of the sweetener.
Currently, refiners sell DO letters to a selected number of businessmen - popularly known as DO-holders - instead of marketing their products through dealers. The DO-holders later sell the papers to the dealers.
The refiners, who account for around 80 per cent of the country's total sugar production, said time has come to abolish the highly controversial system, as it gives the DO-holders opportunity to hold the market hostage.
The refiners said they are totally against the DO system, which is largely blamed for destabilising the sugar market, particularly ahead of the month of Ramadan.
"Due to the DO system, a handful of people control the whole market," said a leader of Bangladesh Sugar Refiners Association (BSRA).
"We are the main sugar producers in the country. But we cannot determine the price. Instead, we are forced to sell the item as per the price fixed by the DO-holders," he told the FE.
The refiners said Bangladesh could easily sell the excess sugar in the overseas markets as there has been a high demand for the item in countries like India, Nepal, Bhutan, Bulgaria, Germany, France, Malaysia and China.
The country's sugar production now stands at 2.4 million tonnes, exactly double the total national annual consumption of 1.2 million tonnes.
"We should be allowed to sell our excess production abroad as the government talks about exports diversification," said another BSRA leader adding that there is no need to restrict exports after fulfilment of local consumption.
The government move to import around 60,000 tonnes of sugar ahead of Ramadan - due to begin in late August - drew flak from the refiners. They said the import would only drain out hard-earned foreign currency reserves at a time when they could have easily purchased sugar from local sources.
Local firm Asia Commodity Ltd has won a tender to buy 25,000 tonnes of sugar at US$514.95 a tonne, officials said.
The government will next week decide on the sugar refiners' pleas to lift exports ban and abolish controversial delivery order system, which is blamed for price manipulation in the market, officials said.
The country's top sugar refiners have already met with Finance Minister AMA Muhith and Commerce Minister Faruk Khan to urge them to allow export of excess sugar produced.
They have also urged the government to take legal steps against delivery order (DO) system - a practice widely blamed for creating scope for widespread price manipulation in the market.
"We have listened to all their proposals. We will sit with other stakeholders before we take any decision," said a senior commerce ministry official, preferring anonymity.
A decision on both the export and DO system issues will come out next week, the official added without elaborating.
The commerce ministry officials Tuesday also held talks with Trading Corporation of Bangladesh (TCB) - the government arm responsible for purchase and sale of essential commodities at fair prices - and an intelligence agency as part of its move to review the market situation of the sweetener.
Currently, refiners sell DO letters to a selected number of businessmen - popularly known as DO-holders - instead of marketing their products through dealers. The DO-holders later sell the papers to the dealers.
The refiners, who account for around 80 per cent of the country's total sugar production, said time has come to abolish the highly controversial system, as it gives the DO-holders opportunity to hold the market hostage.
The refiners said they are totally against the DO system, which is largely blamed for destabilising the sugar market, particularly ahead of the month of Ramadan.
"Due to the DO system, a handful of people control the whole market," said a leader of Bangladesh Sugar Refiners Association (BSRA).
"We are the main sugar producers in the country. But we cannot determine the price. Instead, we are forced to sell the item as per the price fixed by the DO-holders," he told the FE.
The refiners said Bangladesh could easily sell the excess sugar in the overseas markets as there has been a high demand for the item in countries like India, Nepal, Bhutan, Bulgaria, Germany, France, Malaysia and China.
The country's sugar production now stands at 2.4 million tonnes, exactly double the total national annual consumption of 1.2 million tonnes.
"We should be allowed to sell our excess production abroad as the government talks about exports diversification," said another BSRA leader adding that there is no need to restrict exports after fulfilment of local consumption.
The government move to import around 60,000 tonnes of sugar ahead of Ramadan - due to begin in late August - drew flak from the refiners. They said the import would only drain out hard-earned foreign currency reserves at a time when they could have easily purchased sugar from local sources.
Local firm Asia Commodity Ltd has won a tender to buy 25,000 tonnes of sugar at US$514.95 a tonne, officials said.