STC halts selling sugar from its fair-price shops

KATHMANDU, Oct 7: ​Government in the past allowed Salt Trading Corporation (STC) to import sugar at subsidized custom rates and supply it in a bit to regulate sugar prices in the market.

However, the government move has been counterproductive this time. The STC has enough stock of sugar in its store, but it has stopped selling sugar at the time of Dashain. In the meantime, private sugar mills have been hiking sugar prices, and consumers have to pay as much as Rs 85 per kilogram.

Talking with Republica, Brajesh Kumar Jha, an official from the STC, said that the government has to take a quick decision over this issue as they have 17,500 metric tons of sugar in their store that is supposed to be distributed in the market.

"We are just waiting for the government decision. We have already submitted our documents and clarification on sugar price," Jha said claiming that government cannot direct them to sell sugar at loss.

According to Jha, the government did not provide them subsidy on sugar import like in the past years. The STC has suggested the government to fix the price at Rs 70 per kg, accounting for 30 percent custom tax, 13 percent Value Added Tax, transportation costs, and other miscellaneous expenses.

According to Jha, The STC sold sugar at the price of Rs 70 on September 28 and 29 as per previous agreement with the government. After that they halted to sell sugar as the government directed them not to sell at that price.

"After the government get information about some of the sellers are selling sugar at prices lower than the STC, it directed us not to sell and we stopped accordingly," he told Republica.

He also claimed that they have not received any formal direction to sell sugar at Rs 63 per kilogram, as reportedly directed by the meeting of the Public Accounts Committee (PAC) of the parliament.

"Selling sugar at Rs 63 will be a little bit hard as we have imported international standard sulfur free sugar at higher prices," he said. "Quality determines the price and we cannot compromise on it."

He also argued that the STC cannot blindly follow the price of other retailers.

According to the STC, annual demand of sugar for Nepal is 250,000 metric tons, while the sugar industries inside the country are producing only 174,000 metric tons.

"We don't have other option than importing sugar. Obviously, we have to determine the price as per our investment and the standard of sugar," he said, adding that if the government could not give them subsidy, then they have to compromise on the retail price.

On Thursday, the PAC had issued a directive to the government to ensure that the consumers are not forced to pay more than Rs 63 per kilogram for sugar. Stating that sugar producers have agreed with the government to not raise sugar price following the import restriction, lawmakers have demanded the government to curb price rise.

Minister for Supplies Matrika Yadav, however, said that the decision of the committee has been forwarded to the Prime Minister for guidance on how to implement the directive as the ministry was not able to implement such decision.

Organizing a press meet at the ministry on Friday, a day after receiving directive from the PAC, Yadav had said that the price of sugar could not be enforced as per the parliamentary panel's directive, claiming that the price cap lacked rational ground.

 
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