Normally, the sugar mills should have started receiving fresh sugarcane supplies from the farmers and sugar production would have begun by now. This delay has caused a short supply in the market leading to a rise in sugar prices. [break]
State-owned National Trading Ltd (NTL) and partly state-owned Salt Trading Corporation (STC), which are supposed to intervene in the market and step up supplies during such anomalies, have failed to do anything to keep the sugar prices under check. As a result, retailers have jacked up the sugar price to Rs 75 per kg from Rs 68-70 a kg a week ago.
“Delay in sugar production this season has not only driven up the prices but also encouraged those who are into black-marketeering,” said Sashi Kant Agrawal, president of Nepal Sugar Mills Association.
Sugarcane farmers have not harvested their crop in a bid to halt the supply to sugar mills and press for their three-point demand including rise in sugarcane price by Rs 49 per quintal to Rs 450 a quintal. Last year, the government raised sugarcane price to Rs 401 per quintal and set the sugar price at Rs 56 per kg by offering 70 percent VAT exemption on sugar.
“We are sitting for talks with farmers on Thursday to settle the price of sugarcane and pave the way for a smooth procurement, which would normalize the production and ultimately ease the supply situation in the market,” Agrawal told Republica.
He claimed that sugar production is estimated to go up significantly this year with a bumper sugarcane harvest. Last year, around 150,000 tons of sugar was produced against an annual demand of around 180,000 to 200,000 tons in the country. The government had initially estimated the production of sugar to rise by 13 percent to 2.93 million tons in 2011.
“We can resume production and supply sugar from next week if we are able to settle the sugarcane prices within a couple of days,” added Agrawal.
Kapil Mainali, president of Federation of Sugarcane Producers, said farmers are pressing for smooth payment of their dues by sugar mills, timely production and procurement of sugarcane, and rise in sugarcane price to Rs 450 per quintal. “We are ready to start supplying sugarcane immediately if the mills heed to our demands,” said Mainali.
NTL, which is maintaining around 5,000-6,000 tons of sugar in its stock for the capital, has been releasing only five quintals of sugar to a dealer every alternate day in the capital.
“We are selling five quintals of sugar to each dealer on every alternate day due to insufficient stock with us,” said Dilli Dhoj Karki, a senior official at NTL.
STC and NTC enjoy 1 percent customs facility to import sugar from overseas markets. But they failed to make a timely procurement of sugar and maintain sufficient stocks to intervene in the market.
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