Indian sugar mills association

Govt Raises Sugar Price Tk 8 A

Date:	15 Jun 2011

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News ID:	564

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VOL 18 NO -206 REGD NO DA 1589 | Dhaka, Friday June 3 2011 FE Inside Home First page Last page Politics & policies Views & reviews Opinions & letter Editorial Letter to editor Sports World Country Stock & corporate Trade & market Metro/news Detailed DSE Trading FE Archive [Date selector] GO Daily Sun News Today Sheersha News TRADE & MARKET 0Share Govt raises sugar price by Tk 8 a kg to sell at Tk 53 Import subsidy cut cited as reason Asaduzzaman Pallab The government has raised the price of sugar Tk 8 per kilogramme (kg) to offset the loss incurred from production at its own sugar mills and from the product’s import. Sources at the Ministry of Industries said, after repeated proposal from the Bangladesh Sugar and Food Industries Corporation (BSFIC), the MoI has recently fixed the mill gate price of per kg sugar at Tk 53 from Tk 45. With the latest measure in place, dealers have to procure sugar from various BSFIC mills at the rate of Tk 53 per kg. They will be allowed to add Tk 2 to a kg while selling the sugar in the market as profit margin and transport cost. Additional Secretary of the Ministry of Industries A.B.M Khorshed Alam confirmed the abrupt and sharp hike in the sugar price and told the FE that although the price of state-owned mills’ sugar was lower, consumers didn’t get benefits out of it. The retail price of BSFIC sugar was almost the same as that of the refiners’ sugar in the market. "Moreover, the production cost of per kg sugar in the state-owned sugar mills comes to almost Tk 77. The government has to provide a massive subsidy of Tk 32 for production at its 15 sugar mills, he added. Recently, BSFIC took an initiative to buy sugar from the local and international market to bring stability to the sugar market. It signed a tender deal to import 50 thousand tonnes of sugar from the international market. "In case of importing sugar from the international market, per kg sugar import cost stands at Tk 57. If we sell the sugar at a rate of Tk 45 per kg, the total amount of subsidy stands at Tk 630 million. In order to minimise the import subsidy, we have no other way but to hike the price of sugar," said the Additional Secretary. BSFIC will also procure another 20 thousand tonnes of sugar from the local refineries. Even in that case, a kg of sugar will cost Tk 58. The corporation will import a total amount of around 0.2 million tonnes of sugar through local and international tenders to stabilise the local market. As per the decision, of the total amount, 20 thousand tonnes will be imported through local tender, 75 thousand tonnes through international tender and the rest 0.1 million tonne will be imported under state-to-state agreement. Meanwhile, according to the market sources, retail price of sugar varied between Tk 58 and Tk 60 per kg in the local market Thursday. Against the annual market demand of 1.5 million tonnes of sugar, BSFIC- controlled sugar mills produced just around 0.1 million tonne of sugar in the last financial year. Every year, a major portion of the sugar demand is fulfilled by the private sector refineries.

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