At this time last year, sugar prices surged uncontrollably, with retail prices reaching Tk140 to Tk145 per kilogramme. In response, the government slashed import duties.
Meanwhile, international sugar prices have also seen a decline, which has translated into a decrease in local market prices.
Currently, sugar is being sold at Tk120 to Tk125 per kilogramme across various markets.
With Ramadan approaching, there is a significant influx of both refined and unrefined sugar imports, ensuring that there will be no shortage during the holy month.
This information was confirmed through conversations with industry insiders.
Annually, Bangladesh's sugar demand stands at 2 to 2.2 million tonnes, with an average monthly consumption of 150,000 tonnes.
During Ramadan, this demand doubles, reaching around 300,000 tonnes, leading to market volatility.
According to data from the state-run Trading Corporation of Bangladesh (TCB) and market analysis, at this time last year, open sugar was being sold at Tk140 per kilogramme, while packaged sugar was priced at Tk145 per kilogramme.
Refined sugar producers had attributed these price hikes to an increase in international sugar prices and the rising value of the dollar against the taka.
Additionally, a high range of taxes and duties on sugar imports had driven up local prices.
At that time, imported refined sugar was subjected to a customs duty (CD) of 12%, regulatory duty (RD) of 30%, value-added tax (VAT) of 15%, and advance tax (AT) of 4%, amounting to a total tax burden of 61%.
Meanwhile, the import duty on refined sugar was set at 67%.
To alleviate the situation, on 8 October, the National Board of Revenue (NBR) reduced the existing regulatory duties on both refined and unrefined sugar from 30% to 15%.
Subsequently, on 17 October, the tariff value for sugar imports was lowered from Tk6,000 per tonne to Tk4,500 per tonne to further boost refined sugar supply.
This resulted in an increased availability of sugar, which led to a reduction in its price.
Recent market visits in the capital reveal a noticeable reduction in sugar prices.
Within a month, the price has dropped by Tk2 to Tk5 per kilogramme.
The TCB also reported that, last month, sugar was sold for Tk125 to Tk127 per kilogramme.
Currently, the price has fallen to Tk120 to Tk125 per kilogramme.
Retailers, wholesalers, and mill owners attribute the price decline to the stabilization of the dollar's value and a downward trend in international prices, coupled with the reduction in tax rates.
Suman Howlader, the owner of Ekta Store in Mohammadpur’s Town Hall Market, stated, “The wholesale price of sugar has decreased. As a result, open sugar is being sold for Tk120 and packaged sugar for Tk125 per kilogramme, prices that were previously higher.”
Mohammad Yusuf Ali of Yusuf General Store in Karwan Bazar added, “When the government takes action, prices for goods drop. We are now able to sell at lower prices due to the reduction in sugar duties. This has reduced production costs, allowing mills to sell at lower rates, and we are passing these savings on to consumers.”
Moktar Hossain of Sathi General Store in New Market echoed similar sentiments, noting that sugar prices have fallen, with open sugar now priced at Tk120 per kilogramme and packaged sugar at Tk125 per kilogramme.
"There is no room to sell at higher prices, as the government has set the price ceiling," he remarked. Across other markets in the capital, sugar is being sold within the range of Tk120 to Tk125 per kilogramme.
In the wholesale market of Moulvibazar, the president of the Bangladesh Sugar Merchants Association, Mohammad Abul Hashem, confirmed that the government's tax cuts and falling international prices had significantly impacted local prices.
"In Moulvibazar, the sugar's ex-factory rate has dropped to Tk115 per kilogramme. With the current trend, there will be no sugar shortage, and prices will not rise," he assured.
Mill owners also expressed confidence that the market would remain stable during Ramadan, as substantial sugar imports have already been made.
Leading suppliers such as City Group and Meghna Group are playing a key role in ensuring an adequate sugar supply.
A senior official from Meghna Group, speaking anonymously, stated, "Thanks to the reduction in sugar duties and the downward trend in global prices, sugar prices are falling. With ample supplies in place for Ramadan, there will be no shortage, and prices are expected to remain stable."
Moreover, the Bangladesh Tariff Commission has also confirmed that sugar prices have declined compared to previous months.
Industry insiders note that a significant portion of the sugar sold in Bangladesh is smuggled in from neighbouring India.
During the previous Awami League government's tenure, influential local figures in areas like Sylhet were heavily involved in the smuggling trade.
However, after the government’s fall, smuggling declined for a period.
The smuggling issue had posed a challenge to the local sugar industry, leading to a reduction in local production.
Now that imports have increased, sugar prices are falling.
