Spiraling freight rates fuel sugar prices in local market

Essential commodity sugar has become costlier in Bangladesh, as their prices rose in the international markets because of the supply crunch and increased shipping costs, hitting the wallets of consumers.

Sugar price is skyrocketing in the city’s kitchen market as it is now being sold at Tk 80 a kilogram following a sharp increase of around Tk 10 a kg from the last week’s price.

During the last seven days, the sugar was being sold at Tk 70-Tk 72 a kg in the local market but now it is being sold at Tk 78 a kg to Tk 80 a kg.

However, neither the retailers nor the wholesalers could even explain the exact reason for the sudden sugar price hike.

Talking to the retailers in the several areas in Dhaka, The Business post learned that the refiners have increased the loose sugar price from their mill gate.

Apart from that, the demand for sugar increased further with the opening of hotels and restaurants after the withdrawal of countrywide lockdown.

“The salesman does not accept new orders from us for the packet sugar though loose sugar is available in the market. Even commission on the packet sugars has been reduced from the last week,” said Moin Uddin, a retailer of Mogbazar area, while talking to The Business Post.

“A 50 kg packet is now being sold at Tk 3,680 while it is being sold at Tk 3,400 in the wholesale market,” he added.

The country needs around 12 lakh tons of sugar annually and most of its demand is met by import while Bangladesh Sugar and Foods Industries Corporation produces only two per cent through its domestic resource.

Stakeholders claimed, sugar prices rose in the last couple of days in the wake of the high price of unrefined sugar to the global market and increased demand to the domestic market.

Besides, during the Covid-19 period freight rates went to high around double and it is one of the main reasons to increase sugar price.

In March, a kilogram of unrefined sugar sold at $.34, in July it reached $.39, according to the World Bank commodity Index. Before Covid-19, Brazil to Bangladesh per ton freight rates was $ 35 and it’s now around $ 70, according to the importers.

Director of City Group of Industries, one of the biggest private sector sugar refineries in Bangladesh, Bishwajit Saha said, “We are yet to increase the sugar price in the domestic market.”

However, as the price of the sugar in the international market has witnessed an upward trend during the last three months and some traders might increase the sugar price at the retailers’ end on this ground, said Bishwajit.

He also mentioned that they have already sent a proposal to the Ministry of Commerce to increase the sugar price and are still waiting for a response from the government in this regard.