Sugar prices surge due to trader hoarding, fueled by speculation of reduced supply after a fire incident in a Bangladesh sugar refinery.
In the Asian afternoon session, sugar futures traded in the US closed by -0.70% down to $21.30 per pound, while London sugar futures expiring in May steadied at $610.00 per tonne.
Meanwhile, Bangladesh-based refiners ensure sufficient stock and anticipate incoming raw sugar to meet rising demand during Ramadan.
To control subsidy costs, the Trading Corporation of Bangladesh (TCB) raised its sugar sales price by 43.00% or ৳ 30.00 ($0.27) per kilogram.
Starting today, the government agency will offer sugar, soybean oil, lentils, dates, and rice at subsidized rates to one crore families with previously issued cards.
Humayun Kabir, the representative of the TCB, said that the sugar subsidies have risen due to the higher acquisition cost of the sweetener.
Kabir also noted that the surge in international sugar prices, coupled with the depreciation of the Taka leading to increased import expenses, has prompted the decision to raise the selling price of sugar.
Furthermore, a trader said that a significant kitchen market in Dhaka attributed the increase in sugar prices to the recent fire incident at S Alam’s refinery.
S Alam Refinery Fire Incident Fuels Sugar to Spike
On Tuesday, Saiful Alam Masud, the head of S Alam Group, informed journalists that despite the warehouse being affected by the fire, the factory itself sustained no damage.
Masud expressed confidence in resuming production within one or two days, emphasizing that there is ample stock to fulfill the demand for Ramadan.
He assured traders that there was no likelihood of price increases leading up to Ramadan. The fire, which occurred at a warehouse of S Alam Refinery on Monday, was successfully controlled after 18 hours.
Furthermore, the Director of Corporate and Regulatory Affairs at City Group, a prominent commodity processor, stated that they have not increased the sugar price and are selling it at ৳ 134.80 ($1.23) per kilogram directly from the mill gate.
The director also emphasized an ample supply of sugar, with incoming vessels carrying the commodity, despite facing challenges opening letters of credit for imports. Consequently, he asserted that there is no justification for a price hike.
