Sugar imports now made cheaper

Sugar-import costs are to fall substantially as the revenue board offered concessionary duties to rein in its record-high prices during the upcoming holy month of Ramadan.
The downward revision of import taxes is also aimed at narrowing the gap between the prices of raw and refined sugar.
With the tax cutbacks, import prices of per-tonne crude sugar is estimated be lower by Tk 7,000 while refined by Tk 11,000. However, price would vary on the basis of its fluctuation on the international market, customs sources said.
The National Board of Revenue (NBR) has issued two separate Statutory Regulatory Orders (SROs) making the concessionary- duty benefit effective immediately from Sunday.
The reduced tax will be valid until May 30, 2023.
Under the fiscal intervention the regulatory duty (RD) has been cut to 25 per cent from the existing 30 per cent, while tariff value and specific duty on imports of both crude and refined sugar have been waived.
There was a Tk 3,000 specific rate of duty on per-tonne raw sugar while Tk 6,000 on import of a tonne of refined sugar.
Import of raw sugar not containing added flavouring or colouring matter--beet sugar, cane sugar, other cane sugar under HS codes 17.01.12.00, 17.01.13.00, 17.01.14.00, 17.01.99.00-will be entitled to the concessionary tax.
Talking to the FE, a senior customs official said the NBR relaxed the tax measure to ensure uninterrupted supply of the essential commodity at affordable price in local markets during Ramadan.
"Narrowed price gap between raw and refined sugar would cool the heated market of sugar. It's a fiscal mechanism to relax the market pressure and manage artificial crisis immediately," he says.
Industry-insiders said the consumers would start getting benefit of the tax cuts from the first week of March as currently sugar available on the market has been released paying taxes at previous rates.
On Sunday, raw sugar of Indian make was selling at US$528 per tonne on the international market while Brazilian one $532 a tonne.
Price of per-tonne refined sugar was $610 on the day.
Biswajit Saha, Executive Director of City Group, said around 55,000 tonnes of sugar is in the pipeline that would be available to cater Ramadan demand.
He thinks prices of per-kilogram sugar will be reduced by Tk 5.50 from next month as an outcome of tax cuts.
In October 2022, the NBR had offered reduced tax benefit on import of sugar to cool its prices. The RD on import of sugar was cut by 10 per cent to 20 from 30 per cent as prices surged to Tk 80 per kg in Dhaka city from Tk 75 in a month.
Country's annual demand for sugar is 2.0 million tonnes, and 97 per cent of the demand is met by import with domestic production reaching rock bottom over the years.
Demand for sugar jumped by 0.2 million tonnes during Ramadan binge.
This month, prices of sugar were jacked up by Tk 5.0 for loose and Tk 4.0 for packaged stuff in an upswing in less than three months.
Since February 1, 2023, Bangladesh Sugar Refiners Association (BSFA) has revised sugar prices upward to Tk 107 per kg for loose while Tk 112 for refined packet sugar. Prices of sugar had increased to Tk 102 for loose and Tk 108 for refined on November 17, 2022.
But the sugar prices at the retail level are much higher than that fixed by the BSFA under instruction from the government. The item is also scarce in the market. The wholesalers have been accusing the refiners of malpractice in sugar trading.
Revenue officials say businesses hardly pass benefits of tax cut to the consumers as some of the businesses "maximize their profits with the tax waiver".
"A sudden hike in taxes leaves immediate impact on commodity prices while it takes time to pass on the benefit of tax cut to the consumers," says one NBR official, as consumer-rights campaigners decry that market prices spiral despite duty-waiver benefit because of oligopoly play.
The government imposed 20-percent RD on import of sugar in 2015 first following proposal of Bangladesh Sugar and Food Industries Corporation as production cost in the problem-ridden state-owned sugar mills is higher than that of imported sugar.
Since 2015, prices of sugar have been on a crescendo in local markets as consumers have to pay the price for inefficiencies of local sugar refineries.
An accumulated loss incurred by country's 14 state-owned sugar mills was above Tk 80 billion as of fiscal year 2020-21.

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