KATHMANDU, Oct 23: Sugar prices surged significantly during Dashain, impacting millions of consumers this year. As the general public tends to consume more sugar during Tihar than Dashain, it has caused concerns among the people about sugar prices rising further in the upcoming festival.
However, officials expect sugar prices to decrease during Tihar instead. Government agencies like the Food Management and Trading Company (FMTC) and the Salt Trading Corporation are importing sugar in large quantities with a 50 percent customs discount, which has increased supply and lowered costs, according to government sources.
These two organizations plan to import 30,000 tons of sugar under this customs exemption. The reduction in customs duties is expected to lower sugar prices during Tihar.
Govt's welcome move to address sugar shortage
Currently, a customs duty of 30 percent applies to sugar imports, along with a 13 percent value-added tax (VAT), bringing the total revenue to nearly 47 percent. However, reducing the customs duty from 30 percent to just 15 percent would lead to significant cost savings.
Based on the Department of Customs’ data from the months of Shrawan (mid-July to mid-August) and Bhadra (mid-August to mid-September), officials suggest that a 50 percent reduction in customs duties could lower the cost of sugar by up to Rs 13 per kilogram. However, since transportation costs and other expenses will remain unchanged and the availability of sugar with the customs exemption will be limited, the exact price after adjustment remains uncertain.
Nonetheless, officials indicate that sugar imported with customs exemption is likely to cost less than Rs 100 per kilogram. They also note that a new price cannot be established immediately because sugar has not yet arrived in Nepal. Private traders claim that if permitted to import under the customs exemption, they could sell sugar at Rs 99 per kilogram.
Currently, the market price of sugar has reached up to Rs 120 per kilogram. The FMTC is selling sugar at Rs 102.50 per kilogram, including a Rs 5 discount for the festival season. The Salt Trading Corporation lists a 2-kilogram packet for Rs 225 on its website, while Bhat-Bhateni sells sugar at Rs 108 per kilogram.
However, these prices are high compared to markets in the neighboring country, India. IndiaMart has set the price of refined sugar in Gorakhpur at INR 31 to 37 per kilogram, depending on its quality. Even considering the highest rate, 1 kilogram of sugar can be obtained for about NRs 59.
