Dhaka, Bangladesh (BBN)-Bangladesh Sugar & Food Industries Corp (BSFIC), although struggling to handle huge stocks, will not reissue a tender to export sugar to the European Union as global prices are too low, a senior official of the state agency said on Monday.
Last month, the agency cancelled its first international tender since 2012, to export 25,000 tonnes of sugar to the European Union, as the only bid it received was below the local market, reports Business Recorder.
"At the moment we are not going to reissue the tender as global sugar prices are low. The only bid we received in the tender was even lower than our local selling price," the official said.
Global sugar prices this year have been under pressure from ample supplies from the top two producers Brazil and India, with benchmark New York sugar prices dropping to multi-year lows in September.
White sugar from the government stockpile is being sold at mill gates at 40 taka ($0.51) a kg, almost half the cost of production. Still, the government agency has found it difficult to sell the sweetener, as private refiners are offering the same price but with incentives such as free delivery.
In April, Bangladesh raised the import duties on raw sugar by a third and on refined sugar by half to discourage imports amid a drop in local prices due to already ample local supplies.
Private refiners in Bangladesh still imported around 2 million tonnes of raw sugar in the fiscal year that ended on June 30, up from 1.37 million tonnes the previous fiscal year.
Bangladesh depends on imported raw sugar to meet annual demand of 1.4 million-1.5 million tonnes of refined sugar.
In late 2012, the government allowed exports of sugar by private refiners who had been calling for overseas sales as they have more than 3 million tonnes of refining capacity.
Private refiners mostly import raw sugar from Brazil, India and Thailand while they export refined sugar to East African and Middle Eastern countries.
BBN/ASI-10Nov14-10:30pm (BST)