Money

MoS mulls importing 50,000 tonnes of sugar for buffer stock

- Post Report, Kathmandu

Feb 9, 2017-

Ministry of Supplies (MoS) is considering purchasing 50,000 tonnes of sugar for buffer stock, which will be used to offset price fluctuations.

The Supplies Ministry has asked the Finance Ministry for necessary budget for the purpose. Speaking at a meeting of a sub-committee under the Parliamentary Committee on Commerce, Industries and Consumer Welfare on Wednesday, Supplies Secretary Prem Kumar Rai said they were considering maintaining the buffer stock for the next fiscal year.

“As sugar production in India is reported to have fallen by 40 percent, it is likely to affect sugar price in the Nepal market too,” Rai said, adding the price is also rising in the international market.

Through Salt Trading Corporation (STC), the Supplies Ministry imports 25,000-30,000 tonnes of sugar every year. “However, we are planning to increase the stock this time due to the possibility of a shortage,” Rai said.

The Finance Ministry, however, seems reluctant to release the necessary budget for additional imports. Rai said the Finance Ministry was firm on releasing funds only for the usual import of 25,000-30,000 tonnes.

Seven months ago, sugar price had surged to Rs85-90 per kg from Rs65-70 per kg, and the price rise was attributed to STC’s failure to maintain adequate stock.

Lawmakers demanded the government also allow the private sector to import sugar in order to avoid any possible price fluctuation and ensure smooth supply. Currently, STC enjoys monopoly in sugar imports. “If private sector firms are allowed in the business, resulting competition will ensure improved supply and price stability,” Lawmaker Chandra Maharjan said.

The parliamentarians also expressed concerns about deteriorating financial condition of STC. The public enterprise has been incurring losses in the salt business.

A central monitoring committee under MoS fixes salt price for the domestic market, while another monitoring committee led by the Chief District Officer fixes the price at the local level.

Lawmakers blamed ineffective government prosily for worsening financial health of STC. “The Finance Ministry should initiate reimbursing STC’s money that the government had committed to provide,” Lawmaker Rajya Laxmi Shrestha said.

According to STC, it has to receive more than Rs70 million from the government as of the last fiscal year. The amount includes payments for selling subsidised sugar and operating fair price shops.

Published: 09-02-2017 09:43

More on this story

 

KATHMANDU: The government has failed to reimburse Rs300 million to Salt Trading Corporation (STC) which STC had invested to purchase zinc sheets on behalf of the government. 

The government had asked STC to purchase the construction material to provide relief to survivors of 2015 Gorkha earthquakes. STC also has a large quantity of unused tarpaulin imported for the quake survivors, according to the Supplies Ministry. 

The government has neither distributed the materials to the needy nor has it allowed STC to sell the goods. “This has resulted in huge losses for the enterprise,” said Supplies Secretary Prem Kumar Rai at a meeting of a sub-committee under the Parliamentary Committee on Commerce, Industries and Consumer Welfare on Wednesday. 

The sub-committee directed the Supplies Ministry to coordinate with other government agencies to sell the surplus zinc sheets and tarpaulin with STC. 

It has also directed the ministry to take necessary measures to minimise financial losses of STC. (PR)

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