Price settlement key to make country self-reliant in sugar

Kathmandu, Feb. 12: Sugar industries have claimed that if the government supported in increasing the production of sugarcane and provided a platform to sell sugar, the country could be self-reliant in the white sweetener.


They said that there wouldn’t be delay in paying the price of sugarcane to the farmers if the industries had the concessional loan or buying guarantee. Nepal Sugar Mills Association (NSMA) has proposed sugar price with 7 per cent margins.


High price of canes, import of cheap sugar specially from Pakistan, low-quality seed and government indifference towards procuring domestic sugar are the major challenges the sugar industry is facing today. 

The government set price of sugar is Rs. 62 per kg while the mills pay about Rs. 59 per kg to the farmers while buying sugarcane. 


The Ministry of Agriculture, Soil Management and Cooperatives has estimated that per kg sugar production cost is about Rs. 62.5, and if 13 per cent Value Added Tax and 5 per cent profits are added to that amount, per kg sugar price reaches Rs. 73.56. 


NSMA General Secretary Rajesh Kumar Kedia said that in the current sugarcane price scenario, Rs. 73 would be an appropriate price for a kg sugar. But the imported sugar would be cheaper by Rs. 18.

Kedia said that the farmers couldn’t get quality sugarcane seed which had affected the quantity as well as the quality of the raw material. 


“Parwanipur Sugarcane Research Centre is working to produce seed but its efforts are insufficient. We are providing quality seed to the farmers in a subsidized rate. We buy per kg sugarcane seed at Rs. 1,200 and distribute to our farmers at Rs. 470. Our move is just to get quality and sufficient canes,” said Kedia, who is also the Chairman of Indu Shankar Sugar Mills Limited. 


Industrialists also blamed the government for not buying the domestic sugar, even the Salt Trading Limited publish tender notice for sugar procurement with the criteria, such as the size of the sack, which Nepali producers find hard to meet. 


According to Executive Director of Himalaya Sugar Mills, SK Saraff, a sound database of demand, production and import of sugar and sugarcane production is needed in order to manage the sugar market in the country.

“We also need refinancing facility,” he said. 


The country was almost self-reliant a couple years ago but the price row among the farmers, sugar mills and the government hit the industry hard while some industries like Shree Ram Sugar Mills and Annapurna Sugar Mills still have to pay Rs. 160 million and about 250 million respectively.


Likewise, police had arrested the owners of Indira Sugar and Agro Limited and Annapurna Sugar Mills in last October on the charges of withholding more than Rs. 470 million payments to sugarcane supplying farmers. 


In the meantime, low price of canes discouraged the farmers to plant sugarcane which dramatically reduced the production of the cash crop. 


About 100,000 farmers produce 2 million tons of sugarcane last year and 13 sugar mills crushed them to produce 175,000 tons of sugar which is 45,000 tons less to the total demand in Nepal.

Published in The Rising Nepal daily on 13 February 2019.