Hectic government search for procuring sugar locally yields not much due to lower bidding than jacked-up market prices, sources said, stocking worry about Ramadan binge.
The sweetener will be rationed to 10-million families under TCB operations ahead of the upcoming holy fasting month of Ramadan, as the essential is beyond the reach of commoners.
Domestic sugar refiners are not willing to bid as the rate fixed by government is much lower than current market rates, says a source with good knowledge about tricks of the trade.
The sale of sugar at subsidized price to 10 million card-holder families under the state-run Trading Corporation of Bangladesh or TCB is being disrupted as it is not possible to buy the required amount of sugar as per the target, the TCB said in a letter to the commerce ministry.
More than 10,000 or 11,000 metric tonnes of sugar would be needed to operate the drive of TCB for the month of fasting and religious festivals.
The state trading agency has sought necessary instructions from the commerce ministry to overcome the situation immediately.
It is looking for sugar as mad to operate its Ramadan drive for the 10 million families. But due to lower biding price than the market rate, the refiners are reluctant to sell sugar to TCB. They propose higher price of the product as per production cost, an official said.
When contacted, TCB chairman Brigadier-General Md. Ariful Hassan said, "We are facing some problem to collect sugar for the ongoing sale drive of the state agency. But we are trying to procure necessary sugar for the upcoming Ramadan."
He expressed the hope that they will be able to supply as per requirement.
There is a provision for preparing office cost estimate by the designated committee concerned before floating tender/proposal in the case of procurement of goods, according to Rule 16 (5A) of the Public Procurement Rules 2008.
The official estimated cost is determined by considering the price fixed by the government during purchase of oil and sugar. The tender-evaluation committee has to ensure whether the lowest bid price is consistent with the official estimated cost.
Currently, higher-price proposal for locally sourced sugar is being received than the biding price fixed by the government.
Besides, such item is selling at much higher price in domestic markets than the rate set by the government. So, it is not possible to purchase sugar as per the estimate prepared on the basis of the price set by the government.
The TCB has planned to conduct sales drive on the occasion of Ramadan from March selling some key essentials like soybean oil, sugar, gram, dates and lentils at subsidised rates.
One family can buy a maximum of one-kilogram sugar, two kgs of lentils, two litres of soybean oil and one-kg gram and one-kg dates from the TCB sales points.
The TCB has already floated tenders for procuring edible oil, sugar and lentils from the local and international sources.
On the local market, sugar prices already have skyrocketed amid a supply crunch in Dhaka with traders seeing no way out of the problems they see, including a shortage of dollars for import and an increase in gas price.
Bangladesh Sugar Refiners Association (BSRA) with the consent of commerce ministry on January 26, 2023 revised sugar's maximum retail price (MRP) up to Tk 107 in loose state and Tk 112 in packet per kg.
The association of refiners -- who overwhelmingly dominate the local market following virtual debacle of the domestic sugar mills -- imported raw sugar and refined. They last hiked the prices by Tk 8.0 a kg to Tk 102 and Tk 108 respectively on November 17, 2022.
Currently, the sugar price is much higher on the retail market, even though the government fixed the maximum retail price of the essential to control the price spiral.
There is huge shortage of sugar on the market. No packet sugar is available at shops -- apparently as part of a ploy to avoid writing the MRP on the packet. The essential in loose form is still selling at Tk 120/135 at groceries.
The annual demand for sugar in Bangladesh is 2.5 million tonnes. The local mills produce only 100,000 tonnes and the rest is imported.
On average, 0.11 million (1.1 lakh) tonnes of sugar are required per month. During Ramadan, the demand surges to more than 0.3 million tonnes.
