Finance ministry’s negligence makes sugar expensive in festive season
September 22, 2022 02:45 PM NPT
By: Dilip Poudel
KATHMANDU, Sept 22: Even though the government has set up fair price shops to give some respite to the consumers from the rising prices during the festival, consumers have to buy sugar at a high price this year during Dashain. Although the government has been selling sugar at concessional rates every year during the festival, there are signs that sugar will become more expensive this year.
Currently, sugar is being sold at Rs 110 per kilo in the domestic market. Although the Ministry of Industry, Commerce and Supplies has asked for permission to buy 50,000 metric tons of sugar with tax exemption, the Ministry of Finance has not given the approval, and sugar has become expensive in the market. The supplier sought permission to import a total of 50,000 metric tons of sugar with 40,000 by the Salt Trading Corporation and 10,000 by the Food Trading Company. Urmila KC, co-spokesperson of the Ministry of Industry, Commerce and Supplies, said that permission was sought for the import of sugar under customs exemption to increase intervention in the market, but the approval was not received. "We have sent a letter," she said, "The receipt has not yet arrived."
Failure to intervene in the market by buying enough sugar through government-owned institutions has led to price volatility. While importing sugar, 40 percent customs duty and 13 percent value added tax have to be paid. Traders are cheating consumers by selling sugar arbitrarily. It is expected to be more expensive than the current price during the festive season. The government-owned Salt Trading Corporation and the Food Management and Trading Company are unable to intervene by keeping sugar stocks, which has left the consumers in trouble.
Due to the fact that the government did not give permission to those companies to import sugar in time, the supply was not able to meet the demand. Now business companies and corporations have no sugar. Although the two companies operate fair price shops in different parts of the country, they have not been able to sell sugar. They could not give because they did not have a sugar stock. The demand for sugar increases during festivals. Based on the demand, the price automatically increases especially when the supply is low.
Brajesh Kumar Jha, Divisional Manager of Salt Trading Corporation, said that they could not supply because there was no sugar. "We have not been able to sell sugar at our outlets since the government did not allow us to buy it at a customs discount," Jha said.
Consumer rights activists say that sugar prices have increased due to weak government preparations. Although the government has tried to provide relief to the common consumers by operating fair price shops targeting Dashain, Tihar and Chhath and interfering in the market price, the price of sugar has increased. "If the stock was purchased on time, the price would have been controlled," said Prem Lal Maharjan, a consumer rights activist, "There is a possibility that the price of sugar will reach Rs 120 per kg during the festival.”
He said that while the Ministry of Finance neglected to recommend import at a discounted price, now consumers are forced to buy the sweetener at Rs 110 per kg in the market. "Domestic industry has only 11,000 metric tons of sugar available," said Maharjan, "Without coordination between ministries, sugar required by consumers will not be available in the market this year."
According to the Sugar Producers Association, the price of sugar has increased due to lack of domestic production as per market demand. The Salt Trading Corporation and the Food Trading Company had asked for permission to import sugar during Dashain to control the price hike. As the consumption will increase during Dashain, they asked to bring sugar to avoid a shortage in the market. If there is not enough sugar, there is a possibility of black market.
There is an annual demand of 250,000 tons of sugar in the country. Industrialists say that only about 180 thousand metric tons of sugar is produced in Nepal annually. There are a dozen sugar factories in Nepal. Now private sector businessmen are also importing sugar. The consumption of sugar is high during festivals like Dashain, Tihar and Chhath.