04/08/2011 (Financial Express) - The Trading Corporation of Bangladesh (TCB) has blacklisted 20 suppliers for failing to deliver the agreed essential commodities before the holy month of Ramadan, a top policymaker said Wednesday.

"We first gave them warning to supply the commodities in time. As they failed, we have forfeited their security money and blacklisted them," Commerce Minister Faruk Khan told the FE.

These suppliers won't be allowed to supply anything to the TCB in future, he added.

Mr Khan said they signed agreement with the TCB to supply per tonne of sugar at US$ 630 to 640.

"But, meantime, the price of sugar shot up to $ 800 per tonne. The suppliers then decided not to incur massive losses through supplying the sugar; rather they preferred to lose the security money," the minister added.

Sources said this year 21 traders had received supply orders of sugar, edible oil, gram and date to deliver those before Ramadan so that the government could intervene in the market during the holy month. Of them only one could provide the commodities in time.

Last year some 31 traders were engaged for the task, but none of them could supply any goods before Ramadan leaving the TCB helpless.

The default traders lost security money they paid to the TCB with the tender documents. But they were not given any other punishment or barred from doing business with the TCB.

Sources also said the TCB that time carried out its open market sale activities through buying some 20,000 tonnes of sugar from the Bangladesh Sugar and Food Industries Corporation and edible oil from SG Oil Ltd.

The TCB has a target of buying 200,000 tonnes of sugar, 100,000 tonnes of soybean, 100,000 tonnes of palm oil, and 20,000 tonnes of gram this year to intervene in the market throughout the year.

It set the target of getting supplied 30,000 tonnes of sugar, 20,000 tonnes of soybean oil and 10,000 tonnes of palm oil for the holy month of Ramadan.

These suppliers had committed to delivering the commodities through importing the same from different countries.

A senior commerce ministry official said the TCB is now intervening in the Ramadan market with the products it bought from the local sources.

The government in late June approved Tk 10 billion as bank guarantee in favour of the TCB to import essential commodities targeting the Muslim holy month.

The TCB this year sought some Tk 32.74 billion from the government for the said imports. The ministry for finance (MoF) has rejected the proposal and preferred to provide subsidy to the TCB to offset its loss incurred due to selling essentials at lower prices.

Following the decision, the ministry of commerce last June sent a proposal to the MoF for providing Tk 690 million to the TCB as subsidy for the fiscal 2010-11.