Sugar prices
The business page of a local English daily on May 10 had two reports published side by side on the above subject matter. The one by your staff reporter mourned the lack of profitability of sugar manufacturers. They state that the price fixed is too low and that they are losing Tk.20 per kg. which comes to a loss of Tk.20,000 per ton.
The other report from a news agency sates that the government is going to import 25,000 tons of sugar before Ramadan at US$514.95 per ton. It was not clear, if this price was on FOB or C&F basis. In Bangladesh taka, based at @1$=Tk.70, it comes to Tk.36,038 (rounded off) per ton, or a maximum of Tk.36.10 per kg. If the above price is on FOB basis, then assuming 15% duty, the landed cost at godown should not exceed Tk.42 per kg, covering duty and internal transport costs.
Given these facts, the government can set an ex-mill price of Tk.39 per kg. Surely, this should eliminate the question of financial loss for the sugar manufacturers. They should however, maintain the same quality as of imported sugar. The usual complaint is poor colour of local sugar, which normally is considered to reflect the poor quality!
Such consideration, for a price review, deserves the government's serious attention in the interest of saving foreign exchange and at the same time assisting the local producers to get a minimum return on investment.
May be government should review the matter, and if found to be justified, increase the ex-mill price of sugar.
After all, the industry, from farm to the factory, supports many farmers, and other low paid employees, in this rather labour intensive process of production. Further, sugar is not an essential food item, and increase in its price will not affect the common man's cost of food. The few urban and other better off, can afford to tolerate a few taka increase in sugar price, and this may reduce the consumption of rich food items, and improve our health-- an additional benefit!
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