Refiners demand hike in sugar, oil prices

Private refineries have demanded a further increase in sugar and edible oil prices, citing a hike in the international market.

Trade associations of the two commodities sent separate letters to the Commerce Ministry on Tuesday, proposing Tk26 increase in per kg sugar and Tk15 in per litre edible oil prices.

The ministry's Senior Secretary Tapan Kanti Ghosh told The Business Standard that the new prices may be announced today.

However, he said the prices will be fixed based on the formula and not according to the proposals of the traders.

"Traders have proposed to increase the price by calculating 15% VAT on the total value, which is not justified," the senior secretary added.

The letter came as a response to criticism that refiners are not following prices set by the government.

Bangladesh Sugar Refiners Association said in its letter that the price of unrefined sugar has increased greatly in the international market.

"Currently, raw sugar in the international market is available at $675 per tonne, as against $520 a month ago. But the price has not been adjusted in the domestic market accordingly," said the association.

"In this situation, the members of the association are indecisive and afraid to import sugar," it added.

The government earlier fixed sugar prices at Tk104 per kg. However, it is being sold at Tk140 in the markets.  

Shopkeepers say the price difference is due to them not getting sugar at the wholesale level.

For the past few months, the mills have been increasing the price of sugar by reducing the supply of sugar in the market. Some have almost stopped supplying packaged sugar to the market to sell at higher prices than the government fixed price.

Sugar refiners said, at the current rate, the import price of sugar will stand at Tk131 per kg, and including VAT, it will be at Tk166.

Raw sugar was sold at Tk125 to Tk135 per kg at Dhaka markets on Tuesday, according to the Trading Corporation of Bangladesh (TCB).

Only a handful of companies refine sugar in Bangladesh with three occupying the majority of the share.

The country has an annual demand of 20 lakh tonnes of sugar. Out of this, two lakh tonnes are produced by local sugar mills, and the rest by some private sector companies through imports.

According to TCB data, non-bottled soybean oil is currently selling at Tk165 to Tk175 per litre and bottled ones at Tk185 per litre. Palm oil is selling at Tk125 to Tk140 per litre.