Middlemen destabilising sugar markets, say refiners

Syful Islam Middlemen are active in destabilising the sugar market through transferring supply order (SO), the system which replaced the much talked about delivery order (DO) for commodities' trading, refiners alleged. Sugar refiners have recently complained to the commerce minister Faruk Khan that some middlemen based in Maulavi bazaar in Dhaka and Khatunganj in Chittagong are now controlling the sugar prices through holding the supply orders. "Instead of the refiners sugar price is being fixed by the middlemen cum SO holders who earlier carried out DO business and controlled the wholesale market," sugar refiners' association informed the minister. Faruk Khan has instructed the commerce secretary M Ghulam Hossain to take necessary actions to stop the unlawful practice. The government scrapped the DO system for sugar and edible oil trading from June 21 this year to stop control over market by middlemen. Besides, the government has introduced distributorship system. The distributors will be appointed by the millers themselves. Only the distributors are entitled to receive products from the mill gate for distribution. Millers alleged that the former DO businessmen have started SO business which goes against the distributorship system. They said during the month of Ramadan millers sold sugar at government set price. "The middlemen are selling supply order at lower prices to keep sugar price further lower which is causing great loss to the millers. This is also affecting government's newly introduced system," the millers alleged. They urged the government to stop exchange of supply order through issuing a circular and maintain trading through distributors only. The millers also urged to make it mandatory for refined sugar importers to sell sugar through distributorship system. Trading Corporation of Bangladesh (TCB) statistics show that sugar was selling between Tk 66 and Tk 68 per kilogram in the local market a month back. The price has come down to between Tk 57 and Tk 60 per kg due to supply of imported sugar in the market. During the month of Ramadan price of sugar shot up to Tk 76 per kg in different markets due to short supply. At that time sugar price went up by Tk 20 to Tk 25 a kg.