Sugar factories demand to put ban on sugar imports

Kathmandu, July 23:

The sugar factories in the country have demanded the government either put a moratorium on sugar import or buy their stock at the government offered rate of Rs. 62 per kilo plus Value Added Tax (VAT) as they were unable to sell their product due to the cheap imports.

As the cheap sugar import threatened the domestic industries, the government had doubled the customs duty on the popular sweetener – from 15 per cent to 30 per cent. But the traders had already imported more than 210,000 tons of sugar.

And sugar is being imported unabatedly even now.

The sugar mills in the country produced 178,000 tons of sugar during the last crushing season –from November to May – of which only 30 per cent has been sold while 124,000 tons are in stock.

They have only four months to clear their stock before the next crushing season begins, but they have been unable to compete with the cheap imported sugar.

The Nepal Sugar Mills Association (NSMA) shared their plight over the growing import of the commodity at a press briefing in Kathmandu on Monday.

“There is a demand for 250,000 tons while the country has more than 330,000 tons of sugar – both imported and manufactured in the country. It means we are going to face hard times to clear our sugar stock,” said Shashi Kanta Agrawal, president of the NSMA.

He said that if the government’s proposed rate of Rs. 62 was to be implemented, the cost of sugarcane should also be brought down to Rs. 380- 400 per quintal from the current Rs. 465.92.

As per the estimates of the Ministry of Agriculture, Soil Management and Cooperatives, 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.

“The government should put a complete ban on sugar import, reduce the price of sugarcane and provide concessional loans to the factories to help them make payments to the farmers,” he said.

The NSMA warned that if the government did not buy their sugar, they wouldn’t run their factories in the coming season. It means more than 100,000 farmers’ families will have trouble managing their sugarcane and clearing the fields.

According to general secretary of the NSMA Rajesh Kumar Kedia, they were unable to do business with the government set price as the mills were paying Rs. 59 to the farmers for a kilo of sugar.

In addition to it, sugar mills are unable to sell their by-products, such as ethanol, molasses and bagasse. Although the government had decided to mix 10 per cent ethanol in petrol in order to reduce petroleum import.

In order to settle issues like price and import of sugar, sugar producers have long been demanding the establishment of a high-powered Sugar/Sugarcane Development Board.

The price of Nepali sugar is Rs. 75 while the cost of a kg of imported sugar stands at Rs. 55. Nepal produces 2 million tons of sugarcane per annum.

Published in The Rising Nepal daily on 23 July 2018.