Raise customs duty on sugar imports: NSMA

Kathmandu, Mar. 22: Citing the high cost of production and open import of sugar atjust 15 per cent customs duty, Nepal Sugar Mills Association (NSMA) has asked the government to immediately raise the customs duty on sugar imports.

The sugar mills have been facing severe criticism for the high price of sugar in comparison to the Indian market, but it's due to the high production cost, which is about Rs. 75 per kilogram, said the NSMA.

It criticised the government’s move to allow sugar import a couple of years ago.

The cost of a kg of imported sugar stands at Rs. 55, which is about Rs. 20 cheaper than the Nepali product.

"However, the Ministry of Agriculture, Soil Management and Cooperatives estimates that the per kg production cost of sugar is about Rs. 62.5. If the Value Added Tax (13 per cent) and profit (5 per cent) are added to that cost, per kg price reaches Rs. 73.56," said the Association.

On the contrary, according to the government,domestic sugar is expensive by Rs. 18 than the imported one.

The NSMA has demanded a hike in the customs duty on sugar as the other South Asian nations, including India, are charging up to 100 per cent duty on sugar.

The government last year had proposed hiking the duty on sugar to 50 per cent in order to safeguard the sugarcane farmers and the mills.

The Ministry of Agriculture had argued that the move would offer relief to both the farmers and sugar producers and restrict the price of domestic sugar from falling rapidly. But the new provision couldn't be implemented.

"As the government has announced sugarcane as a major agricultural crop and has been trying to attract farmers in taking up its farming, this is the time to raise the customs duty in order to discourage sugar import and safeguard the interest of the producers and farmers," said the association.

It said that if imports were discouraged, Nepali sugar producers would be able to send sugar to the market at Rs. 75 per kg.

The sugar producers have also long been demandingthe establishment of high powered Sugar/Sugarcane Development Board and sectoral research and development institutions.

According to the recent statistics, about 100,000 farmers are engaged in sugarcane farming and producing 2 million tons of sugarcane per annum.

In current fiscal year 2017/18, farmers supplied the sugarcane worth Rs. 11 billion to the sugar mills, which resulted in the production of 175,000 tons of sugar against a demand of 220,000 tons.

The country has 13 sugar mills.

Published in The Rising Nepal daily on 23 March, 2018.