SUGAR price registered a sharp rise in the market to upto Tk 46 per kg from Tk 39 a kg at the lowest two weeks ago. Media reports quoted local businesses as saying that they have hiked sugar prices, speculating a possible move by National Board of Revenue (NBR) to impose 15 percent VAT on imports of sugar to allow the stock in the hands of Bangladesh Sugar and Food Industries Corporation (BSFIC) to be disposed under an artificially protected market. The state-run (BSFIC) has about 1.15 lakh tonnes of sugar in the stock which it can’t sell because imported sugar sells at much cheaper than locally produced sugar by 15 state-run sugar mills in local market. It appears that the government is going to punish consumers for no fault of their own.
NBR had imposed 20 percent regulatory duty on raw and refined sugar imports in August to pave the way to selling the local stocks of the BSFIC mills. It is not clear whether or not the state corporation was able to dispose the stock it had then in hands but the fresh move to impose 15 percent VAT on sugar import again showed that the government is victimizing consumers time and again to buy sugar, a daily necessity, at higher cost only to give a protection wall to locally produced sugar from cheaper import. The most pertinent question here is if imported sugar is cheaper despite being imported using foreign currency and paying shipping and such other trading cost, why the BSFIC is failing to produce sugar locally at lower cost.
It is no secret that state-run sugar mills are highly inefficient, besides being den of corruption and misuse of money, many are engaged in stealing resources and minting illegal fortune. But by the year end, the production cost is estimated inclusive of all such expenditure making locally produced sugar costlier than imported sugar. There is no doubt, Bangladeshi nationals want to protect locally produced sugar but if its quality is lower and price is higher, how long the consumers to be penalized by imposing additional duty on import only to patronize corrupt and inefficient local mills.
We are living in a global free market economy where protective tariff walls are no longer acceptable to protect swindlers and inefficient local producers. The new duty that the NBR is going to impose, per tonne tariff value for raw and refined sugar which are now $320 and $400 per tonne respectively will shoot up to $ 475 per tonne.
In our view the inefficient sugar mills must improve their cost and production efficiency to turn into profiteering and stop calling for demanding market protection. People are not ready to indefinitely pay for their inefficiency.
NBR had imposed 20 percent regulatory duty on raw and refined sugar imports in August to pave the way to selling the local stocks of the BSFIC mills. It is not clear whether or not the state corporation was able to dispose the stock it had then in hands but the fresh move to impose 15 percent VAT on sugar import again showed that the government is victimizing consumers time and again to buy sugar, a daily necessity, at higher cost only to give a protection wall to locally produced sugar from cheaper import. The most pertinent question here is if imported sugar is cheaper despite being imported using foreign currency and paying shipping and such other trading cost, why the BSFIC is failing to produce sugar locally at lower cost.
It is no secret that state-run sugar mills are highly inefficient, besides being den of corruption and misuse of money, many are engaged in stealing resources and minting illegal fortune. But by the year end, the production cost is estimated inclusive of all such expenditure making locally produced sugar costlier than imported sugar. There is no doubt, Bangladeshi nationals want to protect locally produced sugar but if its quality is lower and price is higher, how long the consumers to be penalized by imposing additional duty on import only to patronize corrupt and inefficient local mills.
We are living in a global free market economy where protective tariff walls are no longer acceptable to protect swindlers and inefficient local producers. The new duty that the NBR is going to impose, per tonne tariff value for raw and refined sugar which are now $320 and $400 per tonne respectively will shoot up to $ 475 per tonne.
In our view the inefficient sugar mills must improve their cost and production efficiency to turn into profiteering and stop calling for demanding market protection. People are not ready to indefinitely pay for their inefficiency.
