No major shortage, yet sugar prices rise ahead of Ramadan

Retail sugar prices have risen by up to Tk 10 per kilogramme within a week, even though traders say there is no shortage of the sweetener -- a pattern that recurs almost every year across several essential food items.

Some traders linked the recent price rise to stockpiling ahead of Ramadan, anticipating higher profits as demand for the popular sweetener usually surges during the month of fasting, which will begin in the third week of February.

People in the month prepare a variety of sweet iftar items and drinks to break their fast in the evening.

The price hike comes at a time when consumers are already facing high inflation, which has been hovering above 8 percent for at least three years.

In Dhaka, sugar sold at Tk 100 to Tk 110 per kg yesterday, up from Tk 95 to Tk 100 a week earlier, according to data from the state-run Trading Corporation of Bangladesh. This reflects a 7.69 percent increase over the week.

Tafsir Uddin, a grocery shop owner in Chattogram's Oxygen area, said traders are stockpiling sugar due to wholesale shortages and fears of supply disruptions, pushing up retail prices.

"Within a week, prices have increased by Tk 10 per kg," he added, alleging that sugar refiners have reduced supply ahead of Ramadan.

Shopkeepers also said that the price hike is due to tighter wholesale supply and stockpiling over concerns about availability ahead of Ramadan.

A market visit to Asadganj, Chaktai, Agrabad, and Pahartali confirmed the rising prices, although updated packaged sugar rates have not yet reached all shops.

At the wholesale level, a 50-kg sack now sells for Tk 4,950 to Tk 5,150, up Tk 180 to Tk 200 depending on the brand.

Abul Hashem, president of the Bangladesh Sugar Traders' Association, said the price hike is partly due to a temporary supply disruption.

"The market is facing a shortage because shipments from City Group have been delayed. The ship carrying their supply has not yet arrived, but is expected within a week. Once it does, the situation will stabilise, and prices will likely decrease," he said.

On wholesale prices, Hashem added, "A week ago, sugar was selling at around Tk 3,250 to Tk 3,280 per maund, but due to the supply shortage, it has now risen to Tk 3,370 to Tk 3,380."

Muzibur Rahman, head of accounts at Meghna Group of Industries, one of the country's largest commodity importers and processors, disagreed that there is a supply shortage.

"Imports are proceeding normally, and there is no disruption in supply, but stockpiling has temporarily pushed prices higher. The market has enough sugar for the next two to two and a half months," he said.

Reporters tried to contact Biswajit Saha, director of corporate and regulatory affairs at City Group, but he was unavailable for comment.

Bangladesh consumes 20 to 22 lakh tonnes of sugar annually, with about 3 lakh tonnes used during Ramadan. The country meets nearly 98 percent of its sugar demand through imports, as domestic production remains limited.

Meanwhile, the Consumers Association of Bangladesh, in a press release yesterday, condemned sudden sugar price hikes, blaming artificial shortages and market syndicates for the surge, and urged immediate government action to protect consumers.