Wholesale sugar market turns erratic

The wholesale sugar market has turned volatile merely two days after private sugar refineries proposed a price hike. The situation caused retail market traders to hike prices impulsively. The price of sugar rose by as much as Tk 8 per kg in the capital’s kitchen markets on Sunday.

In the wholesale market on Saturday, the price of refined sugar suddenly went up by Tk 6 per kg. Although the price dropped slightly on Sunday, it was still Tk 4 per kg higher than the previous week.

Traders say that if the price of the dollar stabilises, the price of sugar will also become stable. The sugar market has become volatile mainly due to rising fuel oil and dollar prices.

After visiting several markets in the capital and talking to the wholesalers of Moulvibazar, this correspondent found that until last Thursday, loose refined sugar was being sold at Tk 77-78 per kg. On Saturday, it suddenly increased by Tk 6-7 taka to Tk 84 per kg. However, on Sunday, the item was sold slightly lower at Tk 82.90.

When asked, Haji Md Salahauddin, a wholesaler in Moulvibazar, told The Business Post that the wholesale sugar market became unstable over the last couple of days. Sugar is being sold for Tk 6 per kg more than the previous week.

“Today (Sunday) the price has decreased a bit. But if the dollar price does not stabilise, the market may not stabilise either,” he added.

Sugar was being sold for Tk 90 per kg in the retail market at Karwan Bazar and other markets in Segunbagicha of the capital. Traders said that the total cost for a kg of sugar summed up at Tk 86. Hence, they’re selling it for Tk 90. Last week, the price was Tk 82-83 per kg.

Some retailers have even stopped buying sugar altogether due to the volatility. This has slightly reduced the supply in the market.

According to the Trading Corporation of Bangladesh (TCB) data, the price of sugar has increased by 11 per cent in the last month.

Mostafizur Rahman, a grocery shop owner of Segunbagicha market, said on Sunday, “A week ago, I bought sugar from the wholesale market at Tk 78 per kg. Considering all other expenses, I was able to sell at Tk 82-83 per kg. However, now I am buying the same item at Tk 86-87 per kg.”

The shop owner added that due to the sudden increase in the price, he has stopped buying sugar for the time being.

Earlier, Bangladesh Sugar Refiners Association sent a letter to the Ministry of Commerce demanding that the government waive import duty and supply dollars at the current bank rate for import payment, besides raising the price of sugar urgently in the wake of the soaring dollar prices.

In the letter, the organisation said that sugar refineries opened LCs (letters of credit) with deferred payment facility but they had to pay extra taka against the dollar in settling the LCs, as a result of which they have been incurring huge losses.