Sugar price now Rs 53 per kilogram

KATHMANDU, May 27: Retailers have started selling sugar at Rs 53 per kg across the Valley from Wednesday. The new rate is seven rupees cheaper than what prevailed in the market till Tuesday. Amid shortage of sugar due to decline in production, retail sugar price had shot up to Rs 60 per kg for last couple of weeks. [break]

“Retailers have begun selling sugar at the new rate after the government decided to supply us at lower rate," Siddhi Gorkhali, office secretary of Nepal Retailers´ Association told Republica.

Gorkhali said National Trading Limited, a government undertaking, and Salt Trading Corporation, a semi government entity, have agreed to provide sugar to retailers at Rs 51.75 per kg up to five quintals at a time on the recommendation of the association.

“Member retailers of the association will get the recommendation through its 33 area offices and the head office,” said Gorkhali. Retailers will get recommendation for sugar through Patan Khadya Byapar Sangh and Bhaktapur Retailers Association also.

The government effort to sell sugar at subsidized price was delayed due to dispute between retailers and Salt Trading and National Trading about commission. Originally retailers were offered a kg of sugar for Rs 52.75 per kg to be sold at Rs 53 per kg. Retailers had rejected the offer citing that they can´t sell sugar with a meager commission of Rs 0.25 per kg.

The association has about 2,300 members. Each retail shop is estimated to sell average 50 kg of sugar every day.

Nepal needs 110,000 tons for annual consumption with the domestic production falling short of 50,000-60,000 tons as compared to total requirement.

Price of sugar has skyrocketed for the last few days due to drop in sugar production in the country as well as in the world market.

According to the Ministry of Agriculture and Co-operatives (MoAC), the production of sugarcane nosedived to 2.48 million tons in 2008/09 from 2.6 million tons the year before.

In a bid to cool down the ballooning sugar price, the government had decided to intervene in the market by distribution sugar through National Trading, Salt Trading and Nepal Food Corporation at subsidized rate of Rs 51.5 per kg. To ease the supply, the Ministry of Commerce and Supplies has already decided to procure 50,000 tons of sugar from India. However, the decision has yet to be endorsed by the cabinet.

International Sugar Organization (ISO) said sugar production across the world is expected to fall short of production by 4.3 million tons as compared to last year. The production was forecasted 161.53 million tons this year. However, the global consumption is expected to go up by 1.5 percent to 160.9 million as compared 158.6 million tons the previous year.