TCB seeks Tk 14.11b from govt to offset its losses against subsidised commodity sale

Trading Corporation of Bangladesh (TCB) has sought over Tk 14.11 billion as subsidy from the government to help offset its financial losses on account of selling essential commodities at subsidised rates, sources said.

The state-run agency in a letter recently requested the commerce ministry to take necessary steps so that it gets the said amount of fund as subsidy for the July-December period of the last fiscal year, according to them.

The Ministry of Commerce (MoC) has already forwarded the request letter to the Ministry of Finance, seeking the latter's necessary measures in this regard.

The TCB sold certain essential commodities including edible oil, lentils, sugar at subsidised prices among 10-million lower-income targeted beneficiaries, aiming to help keep their prices stable in the market.

According to available data, the TCB bought 0.107 million tonnes of lentils at a cost of over Tk 12.41 billion and sold the same at Tk 5.87 billion. As a result, it suffered a trade gap amount of Tk 6.54 billion, official sources said.

The state trading agency also faced Tk 36.77 million in trade gap on account of selling 448 tonnes of sugar at Tk 28.3 million against its procurement price of Tk 65.60 million.

The TCB purchased about 94.9 million litres of soybean oil at Tk 16.91 billion and sold the same at Tk 9.37 billion, counting a loss of Tk 7.54 billion.

The TCB had to borrow funds from banks at the interest rates ranging between 9.0 per cent and 12 per cent, a senior official told the FE, adding that such higher rates of interest pushed up its overall commodity procurement costs.

Besides, the TCB had to pay 2.0 per cent income tax against its sourcing of commodities from the local market and provide Tk 5.0 and Tk 7.0 as operating costs for selling per kg/litre of the items.

Earlier, TCB had sought around Tk 100 billion of funds directly from the government to help lessen its dependence on costly bank borrowing, said a source.

At present, the TCB sells essential items every month at subsidised prices, targeting the lower income group of people.

Most recently, the government has decided to include five more items in the TCB's sales list of essential items from November next.

The new items are: Tea, salt, detergent, and two types of soaps.

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