Thursday, 9 December, 2021

After fertiliser muddle, sugar shortage likely to hit festival season


By Laxman Kafle

Kathmandu, Sept. 6: The country is currently reeling under severe shortage of chemical fertilisers in high crop cultivation season, but the Nepalis may experience a similar shortage of sugar during Dashain and Tihar.
The shortage of sugar is already felt in the market which has spiked its price up to Rs. 95 per kg from Rs. 78 a few weeks ago. Sugar is a much sought-after item during the festivals, especially in Tihar.
Shortage of sugar and price hike in the sweetener at the festival season has been a recurring problem in Nepal for yeras. During Dashain and Tihar festivals every year, the consumers either face a shortage of sugar or suffer from its soaring price.
Normally, price of sugar begins to go up artificially for four months period from Nepali month Shrawan to Kartik – mid-July to mid-November, when major festivals fall and the stock of local production gets diminished. But its price starts to fall from Mangsir (mid-November) after the sugarcane crushing season begins in Nepal.
If the government fails to intervene in the market with the increased supply through the public enterprises like Sat Trading Corporation Limited and taking action against black marketers, the looming crisis is sure to trouble the market and the consumers.
At present, STC is selling sugar to consumers at Rs. 73 per kg through its outlets. But the shopkeepers are selling the product at Rs. 95 per kg.
Delayed decision affects imports
The government’s delay to allow public enterprises to import sugar at a concessional rate has resulted in unnatural increase of sugar price in the local market, said Urmila Shrestha, Chief Executive Officer of STC.
The traders tend to increase sugar prices artificially in the market showing the short supply every year when the stock of sugar in STC starts shrinking.
 “At present, we have only around 800 tonnes of sugar in stock. With the reduction in our stock, we have stopped selling sugar to the wholesalers. STC is selling only two kg of sugar to each consumer from our outlets,” she said.
A month ago, the government allowed the public enterprises to import 30,000 tonnes of sugar. The Food Management and Trading Company Limited (FMTCL) was allowed to import 10,000 tonnes and STC 20,000 tonnes.
The STC and the FMTCL have started the tender process to import the sugar. While STC has already issued the re-tender notice, the FMTCL issued a tender notice on August 23 with a 45-day deadline to import sugar.
“Our target is to import sugar before Dashain festival in order to keep the price under control,” Shrestha said.
The evaluation of bidders has been completed and the board of directors of STC will award contract to the selected bidder within a week, she said.
The supply of the sweetener will be eased and price will stabilise only after the arrival of imported sugar, she said.
The country requires over 32,000 tonnes of sugar during Dashain and Tihar festivals.
No stock of sugar available with sugar mills
Sashi Kanta Agrawal, president of Sugar Producers’ Association, said that the sugar mills have no stock of sugar now. Around 180,000 tonnes of sugar was produced by the domestic sugar mills in the last season.
The annual demand for sugar stands at 250,000 tonnes. And the shortfall in sugar production against annual demand is the main reason behind the shortage and rise in its price.
The production of sugarcane has not been increased in line with the demand as many sugarcane farmers have shifted to other crops after they were unable to receive dues from sugar industries in time. Sugarcane farmers are yet to receive dues amounting to millions of rupees from the sugar mills.
Wholesalers, mill owners hike prices
Retailers blamed that the wholesalers and mill operators are responsible for the shortage and price hike.
Raj Kumar Shrestha, President of Nepal Retailers’ Association, said that the price of sugar had increased by Rs. 10-12 per kilogram to Rs. 90 within one and a half months.
There is no shortage of sugar in the market because retailers are purchasing sugar from wholesalers as per their demand. If there is a shortage of sugar, retailers cannot get it even if they are ready to pay any price, he said.
Ministry to import additional 20,000 tonnes
Joint spokesman of the Ministry of Industry, Commerce and Supplies Urmila KC said that the ministry was mulling to import additional 20,000 tonnes of sugar.
The ministry will submit a proposal to the Ministry of Finance seeking approval to import the additional amount of sugar.
The concerned government body is also monitoring the market to control artificial price hike of sugar by the traders on pretext of shortage. About 15,000 tonnes of sugar is in stock with private sector and the public enterprises.
Black marketers’ heyday
President of National Consumer Forum Prem Lal Maharjan claimed that black marketing activities were growing under the protection of the government itself.
“I found that the price of sugar is Rs. 100 per kilogram in Patan of Lalitpur district. No one has taken action against the black marketers,” he said.
Two years ago, price of sugar suddenly increased during Dashain after the government imposed a ban on its import adhering to the suggestion of the traders. Then the traders suggested the government of stopping sugar import citing that local sugar could not be sold because of the imported sugar.
But private traders are importing sugar illegally even now, he said, adding that around 48,000 tonnes of sugar had entered Nepal via customs out of 150,000 tonnes of sugar being imported from Uttar Pradesh of India.
He said that they had drawn the attention of the government to check illegal import of remaining 102,000 tonnes of sugar.