By Laxman Kafle
Kathmandu, Apr.4: The production of sugar across the country has dramatically decreased this year.
According to the Nepal Sugar Producers’ Association, sugar production has decreased by 45 per cent compared with last year -- from 180,000 tonnes to 100,000. “The factor responsible for this is the reduction in its cultivation area, which in turn is attributable to dispute over the payment to the sugarcane farmers,” said Sashi Kanta Agrawal, President of the Association.
Agrawal said that the production of sugar had hit historic low, below than what they had expected, and that it didn’t bode well for the economy.Some 13 years ago, Nepal used to export surplus sugar to India, but the situation is opposite now, Agrawal told The Rising Nepal.
Of the 14 sugar mills across the country, four are out of business already. The 10 mills which are in operation are functioning below their capacity for lack of sugarcanes.
“Nepal consumes about 260,000 tonnes of sugar annually, of which only 38 per cent is met by domestic production. However, the home-produced sugar is not sold in the country due to its illegal import,” Agrawal claimed.
Stating that the trend of importing sugar through the informal channel is on the rise, he said that the government should control that immediately. “Its production cost has gone up this year by Rs. 2 per kg,” he said, adding, “Sugar is being sold at Rs. 85 per kg in the local market.”
Kapilmuni Mainali, President of the Federation of Sugarcane Producers’ Association said that the agitating farmers started cultivating vegetables in what was sugarcane field earlier because of the festering issue over payment. He added that now that sugar mills had started paying them, they were very likely to switch back.
"In addition to that, the increased price of sugar will pull back the farmers to sugarcane fields,” he said. According to official data, sugarcane is cultivated in a total area of 53,531 hectares in the fiscal year 2018/19 across the country.
The Ministry of Industry, Commerce and Supplies has stated that the decision on sugar import will be taken after studying the domestic production.
Urmila K.C, Co-Spokesperson for the Ministry, said that the decision to import sugar from India would be taken only after sugarcane crushing was completed, and that only after that the government-owned institutions would be allowed to import sugar at concessional customs rates.
According to her, the Ministry has already received details of 75,000 tonnes of sugar production from seven sugar industries, but two are yet to furnish the details.
Salt Trading Corporation (STC) has so far imported 20,000 tonnes of sugar in the first lot, which is being sold in the market, she said, adding, “The low domestic production of sugar is likely to up its price, prompting artificial hike.”
She also said that government must control the unnatural price hike by making strong presence of the organisation in the market.
However, STC is yet to receive green light to import sugar.
“We have submitted the proposal to the Ministry of Finance, seeking approval to import 50,000 tonnes of sugar. But the Ministry is yet to reply,” K.C said.