Not a single tonne of sugar was imported through the public sector after the cabinet committee began approving sugar import five months ago amid the closure of government-owned sugar mills resulting in the undue dominance of private mills in the market and unfettered escalation of prices.
In the past five months, the cabinet committee on government purchase approved importing 80,000 tonnes of sugar through the Trading Corporation of Bangladesh but any shipment is yet to reach the country.
As the market went under unchecked control of private mills, it allowed them to manipulate prices and dictate supply. In just the last month, the price of sugar has surged by Tk 5 to 7 per kilogram, nearly doubling over the course of a year and a half.
An increase in production costs for sugar-based products has further emboldened traders to raise prices on essential goods. The brunt of this crisis is borne by the ordinary consumer.
In response to this dire situation, the government sought to directly import sugar through the TCB in a bid to stabilise the market.
The purchase committee authorised the import of 25,000 tonnes of sugar on April 12 of this year. Subsequently, further import approvals were granted almost every month. Yet, five long months have passed since the initial approval, and the government has yet to import a single tonne of sugar. Regrettably, there is no clarity regarding when this much-needed import will reach the country.
The TCB officials said a shipment of 25,000 tonnes of sugar from Brazil is under process. However, the precise shipping date remains elusive, with importing companies providing no concrete information.
Consequently, until the import materialises, the sale of government-subsidised sugar through the TCB has been halted.
According to TCB officials, since April last year, the cabinet committee on government purchase has sanctioned the import of over 80,000 tonnes of sugar, with LCs opened for 75,000 tonnes.
Only 25,000 tonnes of sugar are currently in the final stages of importation from Brazil, and their shipment details remain uncertain. It may take an additional 35 to 40 days for the sugar to arrive in the country once it is shipped. In sum, it will take more than two months for the imported sugar to reach consumers, said the TCB officials.
Consumers Association of Bangladesh Vice President Najer Hossain said the closure of the country's sugar mills and the government's cessation of sugar sales at a subsidised rate have provided an opportunity for private mill owners to manipulate supply, adversely impacting consumers.
He further contends that TCB sales would alleviate the economic strain on low-income individuals, as well as potentially curbing price hikes in the private sector.
Asked about the prolonged delay in sugar import, TCB Chairman Ariful Hasan told The Business Post the sugar currently in the process of shipping had initially been approved for the second and third rounds of procurement after the initial approval. “The suppliers failed to fulfil the initial orders. Additionally, attempts to import sugar from India proved fruitless, contributing to the lag in imports,” he said.
“Regrettably, the timeline for sugar imports remains uncertain until the shipping process is successfully completed. TCB’s selling sugar at a subsidised rate will remain suspended till the sugar reaches the country,” he added.
TCB data itself reflects the dire consequences of this inaction, with retail sugar prices surging by Tk 5 to 7 per kilogram in just one month. A mere month ago, sugar was available in the retail market for Tk 128 to 135 per kilogram, compared to today's prices of Tk 135 to 140 per kilogram.
CAB data illustrates that retail sugar prices in the country stood at Tk 110 to 115 per kilogram in January of this year. Over the next six months, prices surged by Tk 20 to 25, reaching Tk 130 to 140 per kilogram. Meanwhile, the government-set price remained fixed at Tk 120 per kilogram, disregarded by mill owners, wholesalers, and retailers who sold sugar at their preferred rates. Periodic shortages in sugar supply have pushed prices to as high as Tk 150 to 160 per kilogram at the retail level.
In March and April of the preceding year, sugar prices ranged from Tk 78 to 80 per kilogram. In just over a year, sugar prices have essentially doubled.
According to the Bangladesh Trade and Tariff Commission (BTTC), the country typically demands an average of 1,50,000 tonnes of sugar per month, rising to 3,00,000 tonnes during Ramadan.
With one crore TCB cardholders, even if only one kilogram of sugar is offered to each cardholder at a reduced price, TCB's monthly demand stands at 10,000 tonnes. If cardholders are entitled to two kilograms, the demand doubles to 20,000 tonnes.
As per such calculation, the resumption of TCB sugar sales would cater to approximately 13 per cent of the country's total demand.
