Chattogram, Bangladesh: The Bangladeshi government’s attempt to control rising sugar prices by lowering fixed customs duties has backfired, with prices continuing to climb, reported TBSNews.
The government’s decision to cut the fixed customs duty by 50 paisa per kg, deemed minimal by importers, still leaves them burdened with Tk42 in tariffs.
On February 22, the industries ministry swiftly rescinded its decision after announcing a Tk20 per kg increase in brown sugar prices by Bangladesh Sugar and Food Industries Corporation. However, during this interim period, sugar prices soared by Tk4-5 per kg, despite the eventual reversal of the price hike.
Traders report a significant spike in sugar prices per maund (37.32 kg) in the Khatunganj wholesale market in Chattogram over the past week. Prices surged by Tk120-140, reaching Tk5,000-5,020 per maund, compared to Tk4,880-4,900 a week earlier. This increase trickled down to the retail level, pushing up prices by Tk5 per kg.
The government had earlier, on February 8, reduced fixed customs duty on sugar imports from Tk1,500 to Tk1,000 per tonne, resulting in a 50-paisa cut per kilogram. Importers argue that this cut had minimal impact, asserting that, due to additional duties imposed by the government, they are compelled to sell sugar in the local market at nearly double the prices seen in the international market.
Prodip Karon, DGM (Sales) of City Group, a conglomerate involved in sugar imports, explained, “The cost has been reduced by only 50 paise per kg following the recent duty cut. Despite this, the duty per kg is heavy at around Tk42 per kg on imported sugar including 15% VAT, 30% regulatory duty, and 2% advance income tax.”
Karon further highlighted that, due to extra duties and the high cost associated with paying for imports in US dollars, domestic sugar prices remain unaffected.
According to data from IndexMundi, the current booking price of sugar per kilogram in the international market averages 57.75 cents (equivalent to Tk69). In various states of neighboring India, sugar is reportedly being sold at Rs38-43 (equivalent to Tk50-57) according to ChiniMandi, a portal for the sugar industry. In contrast, the Bangladesh market witnesses sugar being sold at Tk145-150.
