The dynamics of the sugar market in Bangladesh in 2023 revealed a complex interplay of global and domestic factors. As one of the leading importers of sugar globally, Bangladesh is highly sensitive to fluctuations in international markets and currency values, impacting the local cost of commodities. The country experienced a surge in sugar prices in 2023, influenced by elevated prices internationally and a strengthening USD. In response to the rising prices and to ensure stability in the domestic market, the National Board of Revenue (NBR) took a proactive step by reducing the import tariffs on both raw and refined sugar. This move aimed to mitigate the impact of higher international prices and prevent excessive inflation in Bangladesh’s local sugar market. The specific duty on raw sugar imports was reduced from USD 27.35 (BDT 3,000) to USD 13.67 (BDT 1,500) per metric ton (mt), while the duty on refined sugar was slashed from USD 54.69 (BDT 6,000) to USD 27.35 (BDT 3,000) per mt.
This adjustment in import duties had significant consequences for trade relationships, particularly with Brazil, the leading sugar exporter globally. The duties reduction made Brazilian sugar more competitive in the Bangladeshi market. Brazil emerged as a key source of sugar for Bangladesh, with shipments from Brazil to Bangladesh surpassing those from any other destination. According to Tridge Transaction Data Service (TDS), transactions done through Tridge reflected Bangladesh as the largest importer of Brazilian sugar between Jan-23 and Jan-24. This underscores the significance of the trade relationship between the two countries in the global sugar market.
Tridge’s TDS played a crucial role in tracking and analyzing these trade dynamics. The data highlighted the emergence of Bangladesh as a key destination for Brazilian sugar and also the specific companies that played pivotal roles in this trade relationship. Known for its prominence in global agriculture and food industries, theLouis Dreyfus Companywas one of the leading exporters of sugar to Bangladesh during this period. The quantity of sugar exported by this company, totaling 424,008 mt, underscored its significant role in facilitating the sugar trade between Brazil and Bangladesh. Other significant exporters to Bangladesh included Raizen Trading, a global player in raw sugar production,Raizen Energia SA, specializing in raw sugar exports to businesses of various sizes, andWilmar Sugar, a major sugarcane energy group in Brazil. The presence of multiple large exporters highlight the robust and diversified relationships contributing to the global sugar supply chain between Brazil and Bangladesh.
Figure 1: Brazilian Sugar Exports to Bangladesh in 2023
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The evolving trade dynamics between Brazil and Bangladesh in the sugar market could experience further positive momentum. The recent proposal by the Bangladesh Commerce Ministry, made on January 22, 2024, to further reduce sugar import duties presents a significant opportunity for both nations to deepen their trade relations. Especially timed in anticipation of Ramadan, the proposal showcases a strategic move to address the specific needs and demands of the local market during a crucial period. If the NBR responds positively to this proposal, it could lead to a reduction in import duties on sugar, making it more accessible and affordable in the Bangladesh market. This potential reduction aligns with the broader trend observed globally, where nations are strategically adjusting trade policies to ensure the stability of essential commodities and address seasonal demand fluctuations.
For Brazil, this represents an opportunity to further establish itself as a reliable and competitive supplier of sugar to Bangladesh. The existing trade relationship, strengthened by the previous adjustment in import duties, sets the stage for increased collaboration. Brazilian sugar suppliers, including key exporters like the Louis Dreyfus Company, Wilmar Sugar, Raizen Energia SA, and SAO Martinho S/A, could find expanded opportunities in the Bangladeshi market. The role of platforms like Tridge's TDS becomes even more pronounced in such dynamic scenarios. Tridge’s TDS, with its comprehensive data and insights, empowers buyers and sellers to make informed decisions. As trade policies and market dynamics shift, having access to real-time and accurate data becomes instrumental in adapting to changing landscapes.