Traders are suspected to have created artificial shortage of sugar to hike market price

Published On: August 4, 2020 06:50 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Aug 4: Creating an artificial shortage of sugar, traders and sugar mills are suspected to be involved in black marketeering of sugar in the domestic market.

According to the Department of Commerce, Supplies and Consumer Protection, traders are reported to have been selling the low priced imported sugar at an abnormal rate in the local market. Netra Prasad Subedi, director general of the department, said the regulator has also kept a number of sugar mills within this frame for their possible involvement in the misconduct. “We have been reported that the mills have been selling the imported sugar under their brands. We have started an investigation to find out the facts,” said Subedi.

Currently, traders who have hiked sugar price to Rs 95-100 a kg from Rs 80 per kg a few weeks ago, blamed the short supply of sugar. Similarly, mill owners have also been saying that they are nearly out of stock of the sweetener. But the market regulator said that the price hike most likely is done simply through hoarding by the large traders creating an artificial shortage in the local market.

Subedi said the department in its market inspection has found a large variation in the actual cost of traders and the market prices. “In many cases, traders have even failed to produce the bills and actual documents of transactions, which has further fuelled up the incredulity of the traders,” he said.

The government has lifted the restriction on sugar import that was in place for almost two years. The records of the Department of Customs show that Nepal imported sugar worth Rs 2.04 billion from India alone in 2019/20. Traders imported sugar worth Rs 220 million in one month period of mid-June to mid-July from the southern neighbor.

Despite an increase in sugar import, the market price of the agro product has been escalating in the local market. Almost every year, the traders raise the sugar price excessively during this time when the festivals are nearer. Subedi said the department has now targeted to bring under scrutiny the importers and distributors of sugar.

The department estimates a shortfall of 80,000 tons of sugar for the festival season this year which will last till next three months. Of the amount, private sectors are expected to supply 50,000 tons while 10,000 tons will be supplied by Food Management and Trade Company and the rest of 20,000 tons will be imported by Salt Trading Corporation. According to Subedi, the government has recently permitted these two public enterprises to import prescribed quantities of sugar for this year.

Subedi said they have also received a large number of complaints on the exorbitant price hikes of vegetables and other food items too. “Prices of some of these are likely to fall soon along with the ease in supply that had been disrupted due to incessant rainfall and landslides,” he added.

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