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demanded immediate withdrawal of import duty to help them procure
enough stock before the sweetener's price shoots up further. In an
urgent letter to the Prime Minister's Office, commerce ministry and
industries ministry on Thursday, local refiners drew attention of
the government to the global sugar market volatility. They urged for
incentives to encourage sugar imports to keep local supply and price
of the sweetener stable in coming months. 'Considering unusual
increase in raw sugar price, the industry requests the government to
withdraw duty on imports,' the Bangladesh Sugar Refiners Association
wrote. Local market is dominated by four to five private sector
refineries, which source raw sugar mainly from Brazil and also import
some quantity from Thailand and elsewhere. Raw sugar is subject to
a flat import duty of Tk 4,000 per tonne. Bangladesh consumes more
than 12 lakh tonnes of sugar annually while the state-owned sugar
mills produced only 75 thousand tonnes in the just-ended fiscal
2008-09. The private sector refiners pointed out that opening of
the fresh letters of credit for raw sugar imports were almost stopped
in the past couple of weeks due to the wild hike in global prices.
The association argued that zero duty may lure refiners into booking
advance orders for coming months. They claimed that sugar price is
still lower in Bangladesh compared with the present level of
international prices. Retailing between Tk 42 and Tk 44 a kilogram,
sugar became costlier by at least 30 per cent in the past couple of
months as refiners adjusted their prices to global price increases.
Delwar Hossain, a leader of Bangladesh Sugar Merchants Association,
said wholesale sugar market remained shaky and local supply could be
hampered when local refineries would run out their stocks. Taherul
Haque, a leading commodity broker said, 'Sugar future has really
become unpredictable now.' Global sugar price soared by $120 a
tonne just in 10 days and reached $519 at New York Commodity
Exchange last weekend, setting its highest price in 28 years.
Projected shortfall in production in Brazil led to global sugar
market volatility and poor output in India sent the world's second
largest sugar producer to import market, further worsening the
situation, market sources said. According to media reports, at
least two months back the Indian government had withdrawn entire
duty on sugar imports to help build a safe stock as sugar price
doubled to 37 rupees per kg in one year in India, whose sugar output
is feared to fall to 150-155 lakh tonnes this year from 263 lakh
tonnes in the year back. Sugar is retailed at 50 rupees in
Pakistan. 'Not only by withdrawing duty, the government should do
everything possible to encourage sugar imports to keep its supply
smooth in the coming months,' said Taher, whose company represents
ADM, world's 3rd largest grains company.
