The Bangladesh Today - July 19

Sugar during holy Ramadan

As has been the common practice and tradition, a minister of the government has assured the people ahead of the holy Ramadan that there would be no shortage of sugar during the holy month and that government would fix the price of the item so that consumers can procure it at cheaper rate. The minister also stated in details the arrangements for ensuring smooth supply of sugar.

 
Industries Minister Dilip Barua on Saturday hoped that there will be no crisis of sugar in the holy month of Ramadan and sugar price will remain stable during the entire month of fasting. Import of two consignments of sugar, each having 25,000 tons, has already been finalized and is expected to arrive in the country by mid-Ramadan. Barua said price of per kg sugar would be fixed at between Tk 40 and Tk 45 at the mill gate of state-owned sugar mills so that the price in retail market can be kept within commoners purchasing capacity. Earlier, on Thursday, Bangladesh Sugar Refiners Association (BSRA) sent a letter to the Industries Minister for fixing the sugar price at Tk 45 per kg at the mill gate as in the last year. 

The Industries Minister said the government has planned a buffer stock of 100,000 tons of sugar through domestic and international procurement to meet additional demand. The BSFIC would import 50,000 tons of sugar. Besides, the corporation would procure another 10,000 tons of sugar locally. The government has a stock of 40,000 tons of sugar. Bangladesh largely depends on imported sugar to meet its annual demand of 1.4 million tons as the state-run sugar mills can produce only 125,000 tons.

But question has arisen as to whether the fixation of price of sugar by the government will be able to ensure the sale of sugar at the fixed price. At least the experience of the people gathered last year amply tells that the market does not abide by the rate fixed by the authorities. It may be pointed out that there is usually higher demand for sugar during the month of Ramadan every year and this causes spurt in the price as the business syndicates go all out to earn lofty profit.

 
The same thing happened last year also. On the eve of the Eid-ul-Fitre last year the price of sugar had shot up to Tk. 60 per kg as against Tk. 42 per kg four weeks ago. Taking the advantage of the higher demand for sugar in the month of Ramadan , dishonest businessmen extracted extra money from the consumers by raising the price of sugar abruptly. Wholesalers reportedly procured sugar at the rate of Tk. 39 per kg from the refiners, but sold it to retailers at the rate of Tk. 55 per kg to earn lofty profit. And the retailers sold sugar to consumers at the rate of at least Tk. 60 per kg. There was visibly nobody to answer why the wholesalers after purchasing sugar at Tk 39 sold it at Tk. 55 per kg holding the consumers hostage to their greed.

 
While the rhetoric continued among the refiners, wholesalers and retailers over the exuberantly high price of sugar and the consumers were forced to bear the brunt of the soaring prices of sugar last year, the government apparently was sitting almost idle as helpless spectator. In the light of that sad experience, it may be difficult for many to be hopeful that the government decision to import only 50 tons of sugar this year will be quite enough to stabilize the sugar market in the face of the market manipulation by the sugar syndicates who are allegedly waiting to exploit the occasion. In view of this, the government should take all necessary measure, alongside importing increased quantity of sugar, to keep the market stable by thwarting the evil designs of the syndicates and ensure smooth supply and distribution of sugar in the market . Above all, market monitoring is a must for ensuring that sugar is sold at the fixed price.

Source : http://www.thebangladeshtoday.com/editorial.htm

The News - July 19

Short of Sugar

As the holy month of Ramadan approaches it would be inconsistent if somewhere somebody had not manufactured a crisis related to a vital commodity that will affect all and sundry. This year it is to be sugar that may be the crisis of choice, with the more pessimistic of pundits predicting that its price may rise to Rs100 or more per kilo. The tale is one of good intent gone bad and calls into question the competencies of those at the top of the Trading Corporation of Pakistan (TCP). It appears that the $50 million contract that the TCP made with a Chinese import company for 100,000 metric tons of the sweet stuff may not be fulfilled despite their having been granted an extension of the deadline for the first delivery. Do not for one moment deceive yourself that the sugar is en-route from China because it is not; it is coming from South America, Brazil to be precise, and our embassy there has confirmed that the port from which the sugar is to leave is congested and delays are likely. So how has the TCP got itself – and us – into this bitter-sweet tangle?

Perhaps the first thing to understand is that there is no Plan B, and the government is in a bit of a tizzy as there is no secret stock of sugar which may be fed into the markets to prevent a shortfall. An unintended consequence is almost certain to be a ballooning of local prices and the hoarding of what stocks there are. The chairman of the TCP has called an emergency meeting for Saturday, the outcome of which we are as yet unaware, but during which he is expected to cancel the contracts awarded to Yunnan and Sadat and further seek damages from them for their failure to fulfil the order. The Chinese had won the order after putting in a tender so low that it practically gave a heart attack to our indigenous sugar importers and a $50 million credit line was opened to them through the National Bank of Pakistan. Had the deal come off we might have saved ourselves as much as $10 million on a single contract. The Chinese may lose the $1 million earnest money that they deposited but the sugar, if it ever arrives, is going to be costly; certainly more than the $488 per metric tonne that was quoted against a market rate above $700 per metric tonne. That a figure so far below the market rate was accepted as credible by the TCP and, what is more, accepted from an importer who has previously defaulted, makes one wonder if there may be a few fake economics degrees held by the directors of the TCP. We now await the reports of pre-shipment inspection companies, but the word circulating in official circles is that the TCP, via a basket of failed contracts, has incurred losses of Rs4.5 billion. And the sugar? Still in Brazil.

Source : http://thenews.jang.com.pk/print1.asp?id=251630