Money

Sugar price shoots up after import quota

- RAJESH KHANAL

Sep 24, 2018-

The price of sugar rose sharply in the local market after the government imposed import quotas on the daily essential despite assurances by domestic mills that prices would not go up.

The sweetener became dearer by Rs15-20 per kg immediately after the quantitative restriction was announced. Manufacturers jacked up prices in the run-up to the Dashain, Tihar and Chhath festivals when demand swells tremendously.

Consumer rights activists said that prices of daily essentials had already increased steeply due to higher freight charges triggered by a hike in oil prices. Now costlier sugar has added to the woes of Dashain shoppers, they said.

Nawaraj Upadhyay, a shopkeeper at Ratopool, said the price of sugar had gone by up to Rs20 per kg. “Retailers have not increased the rates. It’s the wholesalers who have hiked prices,” Upadhyay said.

Last Sunday, the Cabinet approved a quota of 100,000 tonnes annually. The decision follows pressure from sugar producers who have sought the government’s help to protect domestic sugar manufacturers. Mill owners said surplus stocks of sugar were piling up in their warehouses due to cheaper imports. They had promised not to increase the rates after the import quota was implemented.

The Ministry of Industry, Commerce and Supplies had also promised to take prompt and stern action against traders raising the price of sugar. “But the government failed to deliver,” said Radha Mainali, a resident of Ratopool, who was purchasing essentials for the upcoming Sorah Shradda ceremony when people pay homage to deceased family members. 

Sugar producers expressed ignorance about the price hike. “Our cost of production is Rs63 per kg excluding value added tax. Even then we have been selling the product at Rs56 per kg as a festival offer,” said Shashi Kant Agrawal, president of the Sugar Producers Association, at a meeting organised by the Department of Supply Management and Protection of Consumers Interest on Sunday.  Refuting the claim by sugar producers, consumer rights activists accused industrialists of forming a cartel to influence market prices.

“Had the producers stuck to their commitment, wholesalers and distributors would not have raised the price,” said Madhav Timilsina, president of the Consumer Rights Investigation Forum.

State-owned Salt Trading Corporation (STC) also blamed sugar producers for the hike in prices. Established to regulate sugar supply in the domestic market, STC has been mulling to purchase sugar from domestic producers.

According to STC officials, the enterprise has called for bids to buy sugar from domestic mills. “Sugar producers have quoted Rs64 per kg excluding VAT,” a high-ranking STC official said. “This shows that sugar mills have created a cartel.”

STC said it was in a ‘wait and watch’ mode to fix the price of sugar for Dashain. Joint secretary of the Industry, Commerce and Supplies Ministry Nava Raj Dhakal said STC should go for an open market mechanism to buy sugar.

According to the ministry, the government used to provide a customs subsidy to STC to allow it to sell sugar at a cheaper rate.

“After imposing the import quota, the government will not be providing any subsidy to STC,” Dhakal said.

Bimala Khanal, president of the Forum for Protection of Consumers’ Eye Nepal, criticised the government for being unaware of the artificial price hike at the start of the festival season. “A rise in price of Rs15-20 per kg in a week cannot be considered normal,” Khanal added.

Published: 24-09-2018 08:37

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