Bangladesh cut its import duty on raw sugar by almost half on Wednesday amid growing public protests against soaring sugar prices, in a move hailed by the business leaders.
Traders would now have to pay 2,250-taka import duty for per tonne raw sugar, instead of 5,000 taka fixed in the country's 2006/07 (July-June) budget. The duty on import of white sugar will remain unchanged at 5,000 taka per tonne.
Local sugar prices have risen sharply in recent weeks on speculation that India might ban sugar exports to Bangladesh. Bangladesh imports both white and raw sugar from Brazil, Thailand and India, but the latter is its preferred supplier because it is nearby and offers low transportation costs, traders and officials said.
Refiners and traders hailed the latest cut. "This will help stabilise the market," Matlub Ahmed, chairman of the Nitto Sugar Mills Limited, told Reuters on Thursday. "It will save 2.25 taka duty in each kilogram, which ultimately will bring some relief for the consumers," he added.
However, Matlub, who is also a director of the Federation of Bangladesh Chambers of Commerce and Industry, said: "It was not fair to impose a similar duty for imported white sugar and raw sugar since raw sugar is the basic input for sugar industries."
Bangladesh imported 1.05 million tonnes sugar in 2005/06, including 1 million tonnes of white sugar. "With the reduction of duties import of raw sugar will gradually increase and import of white suger will decline," Matlub added.
There are six sugar refineries in the country. Safari said the duty was lowered also to protect the home refineries and with a hope that sugar prices will gradually fall in Bangladesh markets. One kilogram of sugar sold at 50 taka in Bangladesh markets on Wednesday, 20 percent higher than a week ago, traders said.