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The bittersweet problem of sugar

28 Jan 2023 00:00:00 | Update: 28 Jan 2023 01:14:22
The bittersweet problem of sugar

We have observed sugar prices rising steadily and consistently. According to a report published in this newspaper on Friday in less than three months’ time the sugar refiners have proposed to increase the price of sugar for the second time.

The sellers are not following the officially fixed rate and sugar is selling at Taka 130. It is obvious that the authorities concerned have not been up to the task in regulating the spiralling price of the sweetener.

Sugar is not a staple food. But it is a source of daily caloric intake for millions. In spite of its repeated claims of deploying the administrative machinery against unscrupulous market manipulators and hoarders, the government has played the role of a helpless bystander.

Sugar has been a bittersweet problem for the Bangladesh economy. Sugar produced by the heavily subsidised mills fails to meet the local demand mainly due to a scarcity of sugarcane, forcing the government to procure the rest from the private sector.

BSRI has developed and recommended a good number of sugarcane production technologies from planting to harvesting. The technologies include releasing of a large number of high yielding, high sugar content, diseases and pest resistant sugarcane varieties, intercropping with sugarcane, spaced transplanting technology, ratoon management technology, diseases and pest management technology, updating the fertilizer dose for 12 agro-ecological zones and development of some important implements for sugarcane cultivation.

The estimated demand for sugar in the country is around 2.0 million tonnes and only 25,000 tonnes are produced locally. Private millers meet the rest of the demand by refining imported raw sugar.

Sugarcane is grown in almost all areas in Bangladesh, but most of it is produced in Rajshahi, Natore, Pabna, Kuhstia, Chuadanga, Panchagar, Joypurhat and Thakurgaon districts. Because of available raw materials, most of the sugar mills are located in these areas.

According to economists, Bangladesh’s sugar mills are uncompetitive mostly for their high production cost and the import of cheap sugar has turned their condition from bad to worse. The government has been actively pursuing potential foreign investors since 2019, more than a year before it suspended cane crushing in six of the 15 state-owned sugar mills in December 2020, but it is yet to find any prospective party interested in modernising the sugar industry.

According experts excessive sugar consumption is bad for health. However, it is an item that cannot be dropped from the list of essentials, either. The reasons are obvious. But should sugar cost so much in Bangladesh when options are there to cut its price and help lessen the enormous burden imposed on the consumers?

One option could be a cut in duty and taxes imposed on imported sugar. The government might think of lowering the duty and tax rates for the greater benefit of general consumers. The second option---revival of the state-run sugar mills, though a time-consuming move, might prove rewarding in the long run.

If no action is taken now, consumers will likely be compelled to pay more as sugar prices are set to rise further with an increase in demand during the Ramzan, which is coming in less than a couple of months.

Prices are essentially a demand-and-supply phenomenon and cannot be controlled by force alone. The government’s job is to give a fair estimate of domestic output and, in case of expected shortages, import the commodity in time. Even before that it needs to reform the entire supply chain and document it for effective regulation.

To people struggling with inflation it doesn’t matter whether sugar prices are rising because of market manipulation or some other factors. They know that it is the government’s job to ensure the easy availability of essential food items at affordable rates.

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