Sugar refiners have urged the commerce ministry to impose a ban on import of refined sugar for protection of local sugar industry, commerce ministry officials said on Thursday.

In a representation to the ministry, they also made strong pleas for according approval to their proposal to export their products in the wake of growing capacity of the local refineries, they said..

The refiners were told by the relevant officials of the ministry that exports would be allowed only after the local market stayed stable, a senior official of the commerce ministry said.

"However the whole issue, including the approval for exports and imposition of fresh duty on import of refined sugar, is still at an immature stage," another senior official of the ministry said.

But the refiners, mostly belonging to some influential conglomerate of the country, have been trying to impress upon the ministry to meet their demands, traders said.

The sugar price is, however, still high in the local market at Taka 68 per kg against Tk 65 per kg fixed by the government last September last.

Sources said the price of sugar is likely to remain stable in the domestic market, in view of higher yield in the major sugar producing countries including Brazil, China, India, Russia and Thailand.

However, local refiners expressed the fear that import of refined sugar and smuggling of the item from India, one of the world's largest sugar producer, might induce substantial price decline in the coming weeks.

"Prices may fall further, as traders are posing to import white sugar as the prices are falling down in the global market," an executive of a sugar refining factory said.

Importers said they expect the prices might further fall down, creating an opportunity to import white sugar at cheaper prices.

"We did not import much refined sugar in the past year as prices was high, but this time we hope to take chance as prices are easing," a leading importer Mohammad Abul Khair told the FE.

The refiners said a large quantity of sugar, derived from raw sugar imported at higher prices over the past months, were lying as backlog stock in their respective warehouses.

"Under such circumstances, continuation of unabated imports would hurt the refiners financially," an official of refiner S. Alam Group told the FE.

Seven local private refiners have capacity to refine some 2.5 million tonnes of raw sugar a year against the requirements of some 1.4 million tonnes of white (refined) sugar in the country.

Fifteen state-owned sugarcane crushing mills also have capacity to produce more than 100,000 tonnes of sugar a year.

A tonne of white sugar was sold at $669.50 at New York Continental Exchange on Wednesday against some $700 two weeks ago.

A tonne of raw sugar was sold at $584.36 at New York on Wednesday against $652.32 two weeks earlier.

"The prices will depend on demand, but as there is a downtrend in prices, retail price here may remain stable, if not further eased, as the demand has steadily been increasing in the country" a market observer said.

Global raw sugar production crossed 168 million tonnes mark in the crop cycle of 2010-11 (October-September), up 4.66 million tonnes from the previous season, according to the data of the United States Department of Agriculture (USDA).

However, the global consumption is also growing by more than 2.0 per cent annually, traders said.

Global consumption is expected to grow at 2.01%, slower than the 10-year average of 2.6%, due to historically high prices in both the world and domestic markets, the latest data of the USDA indicated.

source: thefinancialexpress

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