Sugar price increases by a third

Published On: August 25, 2016 08:32 AM NPT By: Republica  | @RepublicaNepal

Supply will be normal in festive season, prices will be stabilized by Salt Trading shops: Government officials.

KATHMANDU, Aug 24: The retail price of sugar increased by more than a third over the last four months. The market price of sugar is currently in range of Rs 82 to Rs 85 per kg.

It was at around Rs 65 per kg until May. The price soared in line with the price rise in global markets.

Traders say they expect further price volatility in the coming festive season but government officials have assured that price will stabilize as Salt Trading Corporation started selling sugar in its outlets from the first week of August. Price increased by over US$ 120 per ton over the last five months, according to Urmila Shrestha, general manager at the corporation. The corporation has set a retail price of Rs 84 per kg while the price for wholesale is set at Rs 82.5 per kg. Market prices reached Rs 95 per kg before the corporation stepped in. 

The corporation has already imported 7,500 tons while another 7,500 tons is on its way and will be arriving by the second week of September and there will be no shortage and the prices will stabilize, Ananda Ram Regmi, spokesperson of Ministry of Supplies, says.

The government has allowed the corporation to import 30,000 tons of sugar at 1 percent customs duty. The import is meant for smoothening the supply and for price stabilization. 
Moreover, officials at the ministry have started homework to monitor the domestic sugar factories which have increased prices. Sources also informed Republica that the government is planning to ask sugar factories to submit their cost of production and the price they are charging.

Regmi however says that the abrupt price hike of sugar is without any reason. The hike is under discussion and the government will soon come up with measures to smoothen supply and keep prices under control. 

Sugar prices at the factory gates have increased to Rs 67 per kg from Rs 50 per kg over the last five months, an official at Everest Sugar and Chemical Industries Pvt Ltd said. This excludes 13 percent Value Added Tax. 


Though sugar mills have hiked the price of sugar they are yet to pay the farmers who supplied them sugarcane. The government set a minimum price of Rs 448 per quintal of sugarcane in January however the factories opposed the government decision saying they could pay only Rs 436.

Hundreds of farmers are yet to receive payment for the sugarcane they sold to factories in the last season of harvesting that ended in April.

With the rise in sugar prices, farmers have again demanded that the government ensure payment.

“Factories have earned huge profits with the rise in prices but they are not paying a comparative price for our sugarcane,” Kapil Muni Mainali, the president of the Federation of Sugarcane Farmers of Nepal, says.

“Sunsari-based Eastern Sugar Mills Ltd has not paid farmers Rs 460 million while Rautahat-based Shree Ram Sugar Mills owes farmers Rs 710 million over the season,” Mainali says.

According to Mainali, sugar mills have also offered lower rates than the price set by the government.

Two Kanchanpur-based mills -- Mahankal Sugar Mill and Bageshwori Sugar Mill -- have paid only Rs 400 per quintal while Kapilbastu-based Mahalaxmi Sugar Mill has paid Rs 436 per quintal, according to Mainali. 

Hordes of farmers, mainly in central Tarai, have stopped sugarcane farming after prices continued to fall in recent years and this is also affecting the sugar mills’ output.

Sugar production declined to 177,000 tons last season from the 213,000 tons three years ago, according to a data. Sugar mills paid farmers Rs 481 for a quintal of sugarcane four years ago. Last year rates came down to Rs 448 per quintal.

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