TCB seeks Tk 16b to cover H1 2023 trading losses
The Trading Corporation of Bangladesh (TCB) has requested approximately Tk 16 billion to cover losses from subsidizing essential commodities for low-income families in early 2023. The proposal, now with the finance division, aims to repay loans for procuring items like soybean oil, sugar, lentils, gram, and dates. TCB incurred significant losses: Tk 4.68 billion on lentils, Tk 1.58 billion on sugar, Tk 9.20 billion on soybean oil, Tk 377.17 million on gram, and Tk 125.29 million on dates.
The state-owned Trading Corporation of Bangladesh (TCB) has sought around Tk 16 billion to cover losses incurred in the first half of last year due to selling key essential commodities at subsidised rates among 10 million low-income families, sources said.
Last month, it submitted a proposal to the commerce ministry for taking required steps to get the amount as subsidy for the period from January 31 to June 30, 2023.
The proposal has been forwarded to the finance division to take necessary action in this regard.
With the amount, the TCB would repay the bank loans accrued to procure commodities like soybean oil, sugar, lentil, gram, and dates from both local and foreign sources, and sell at subsidised rates among the card-holder families in the period.
Data shows that the TCB bought 96,916.43 tonnes of lentils at Tk 10.96 billion but sold it at Tk 6.27 billion, resulting in a trade gap of Tk 4.68 billion.
The state trading agency also bought 27,123 tonnes of sugar at a cost of Tk 3.07 billion and sold at Tk 1.49 billion, incurring a loss of Tk 1.58 billion.
The TCB sold some 97.39 million litres of soybean oil at Tk 19.08 billion but sold the edible oil at Tk 9.88 billion, registering a trading loss of Tk 9.20 billion.
It bought 9,772 tonnes of gram for Tk 814.30 million but sold them for Tk 437.19 million, incurring a loss of Tk 377.17 million.
It procured 722.3 tonnes of dates for Tk 193.905 million but sold them for Tk 68.62 million, incurring a loss of Tk 125.29 million.
When contacted, a senior official said, in case of taking loans from banks, the TCB has to pay interest at a rate between 9.0 per cent and 12 per cent. Such borrowing increases import/purchase costs.
Besides, the TCB paid 2.0 per cent income tax when sourcing commodities from the local market and an operating cost between Tk 5.0 and Tk 7.0 per kilogram/litre to dealers.
The selling prices of commodities were fixed lower than both procurement prices and market prices, leading to the trading losses.
The state-run entity last month sought around Tk 100 billion of funds directly from the government to help lessen its dependence on costly bank borrowing, said a source.
Currently, the TCB is operating the essential sales drive every month.
However, it could not make any visible impact on the price situation despite getting a large amount of subsidy every year, said the official.
Source Link: https://thefinancialexpress.com.bd/trade/traders-tanners-squabble-as-govt-set-prices-go-unheeded
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