Govt unlikely to sell sugar at reduced rates during festivals

By A Staff Reporter, Kathmandu, Aug. 28: Consumers will not be able to get sugar at a concessional rate from the fair price shops to be operated by the public enterprises during the festivals this year.

 There is a very slim chance to sell sugar through the fair price shops this year as there is no stock of sugar with the public enterprise - Salt Trading Corporation, said an official.

 "The STC has no stock of sugar. And the government has not allowed STC to import sugar with a customs subsidy. So, it is not possible to sell sugar through the fair price shops this year," Urmila KC, undersecretary and deputy spokesperson of the Ministry of Industry, Commerce and Supplies (MoICS).

 Although the MoICS again proposed the Ministry of Finance to allow STC and Food Management and Trading Company (FMTC) to import sugar targeting the Dashain festival, the Ministry of Finance has yet to decide in this regard, she said. The government had not given permission to STC for the import of sugar on customs subsidy for the last two years.

 "The MoICS prepared to import about 50,000 tonnes of sugar by STC and FMTC for Dashain-Tihar on customs exemption and submitted a proposal to the Ministry of Finance two months ago for its permission. However, since no decision has been taken so far, it is almost impossible to import sugar by public enterprises at customs discount for the festivals," she said. 

This time, the Ministry had proposed to import sugar at 1 per cent customs with zero per cent VAT to control the artificial price hike of sugar that has already been seen in the market.

 Last time, the STC had imported sugar at 50 per cent discount in customs duty.  She said that the STC has already stopped the sales of sugar to customers for the past two months after it ran out of its stock. Due to this, the price of sugar has already increased and has reached Rs. 110 per kg in the market.

 She said that even though there would be no sale of sugar from the fair price shops, the other goods, such as rice, pulses, salt, ghee and other items being sold by the FMTC, STC and DDC would be sold at a discounted rate.

 Earlier, the public enterprises sold essential goods with discounts ranging from Rs. 2 per kg to Rs. 10 through the fair price shops during the festivals.

 "There is no shortage of sugar in the market as there is enough stock of sugar with private traders. So, the government would intensify market monitoring to curb artificial price hikes of essential goods, including sugar, taking advantage of high demand during the festivals," she said.

 Preparing to operate fair price shops

 Like in the previous years, the government is preparing to operate fair price shops in different parts of the country to stop black marketing and arbitrary rise in the price of essential goods during festivals, said KC.

 "We are doing homework to operate fair price shops across the country aiming to provide relief to the general people by offering essential goods at discounted rates. But the actual date to run fair price shops is yet to be fixed," she said.

Sugar price may increase further

 Meanwhile, Kumar Rajbhandari, spokesperson of STC, informed that STC had stopped the sale of sugar even for consumers for the past two months after they finished the stock of sugar.

 "For the past two months, we have stopped selling sugar directly to consumers from STC outlets," he said. After the stock shrank, STC stopped selling sugar to wholesalers about a year ago,” he said.

 Earlier, STC was selling sugar to consumers 2 kg per person at Rs. 79 per kg in retail until three weeks ago.

 He said that the price of sugar which has been skyrocketing in the market after the stop of sugar sales by the STC and the price might   increase further during the festivals.

 "Usually, the demand for sugar is high during the festivals, so the traders would be encouraged to increase the price of sugar. This year, it will be easy for the traders to increase the price due to the lack of sugar with the STC,” he said.

  About 30,000 tonnes sugar required in Dashain-Tihar

 The annual demand for sugar is about 270,000 tonnes. But the consumption of sugar will be at around 30,000 tonnes in the months of Dashain and Tihar festivals, he said. "STC will sell sugar this time or won’t depending on the government's approval," Rajbhandari said. "There is still a chance to import sugar if the government makes an arrangement to import with the coordination of the government of India with special deal.

 Otherwise, there will be no sugar in the fair price outlets this time, he said.