Print Edition - 2017-03-03 | MONEY
Sugar hits Rs95 per kg amid cartelling charges
Mar 3, 2017-
The price of sugar has hit a record high of Rs95 per kg in the Kathmandu Valley with the Nepal Retailers Association charging a sugar cartel of jacking up prices despite abundant supplies in the market.
The government’s inability to maintain a buffer stock of sugar has also been blamed for the surge in prices.
Meanwhile, grocers said that opportunist traders had been selling sugar at inflated rates citing a drop in sugarcane production this season.
Pavitra Bajracharya, president of the Nepal Retailers Association, said the price has skyrocketed as large suppliers had formed a cartel. Sugar cost Rs85-90 per kg in the retail market until a few weeks ago.
Delays by the Supplies Ministry in maintaining an adequate buffer stock of sugar has also allowed dealers to hike prices, traders said.
The ministry had aimed to buy 50,000 tonnes of sugar for the next fiscal year, but the plan was held up due to delays by the Finance Ministry in releasing funds, ministry officials said. Gyan Shrestha, a retailer at Ratopool, said there was no short supply of sugar currently. “However, big traders have increased the price unilaterally,” he said.
There are 11 sugar mills in operation in the country. They produce 165,000 tonnes of sugar worth Rs14.26 billion annually, according to the Ministry of Industry. The country’s annual requirement of sugar amounts to 215,000 tonnes, and the deficit is covered by imports mainly from India and Brazil.
State-owned Salt Trading Corporation (STC) normally imports 25,000-30,000 tonnes of sugar annually.
STC Director General Urmila Shrestha said the corporation had adequate stocks to meet market demand. According to her, this year’s sugarcane output fell sharply by more than 40 percent.
“Considering the drop in sugarcane production and possible shortages, the government has moved to maintain stocks on time,” she added.
Laxman Shrestha, director of the Department of Supply Management and Protection of Consumer Interest, said the government’s decision to import 50,000 tonnes of sugar was aimed at intervening in the market due to the possibility of a rise in sugar prices next year. According to him, the Finance Ministry has recently approved the budget.
Meanwhile, the department has stepped up aggressive market inspection following complaints of a hike in sugar prices. The department investigated four retailers on suspicion of being involved in black marketing.
According to the department, it has asked three outlets in Kathmandu and one in Lalitpur to appear at the department with an explanation for failing to produce bills of sale for their stocks of sugar.
New Lumbini Suppliers, Jay Laxmi Khaddya Bhandar of Koteshwor and Gunjeshwori Trade Link of Kuleshwor and Timilsina Kirana and Khaddya Store are facing action for not possessing the required paperwork.
Meanwhile, the department has checked out STC’s warehouses in Kalimati, Koteshwor and Banepa. According to its report, the corporation has a stock of 90,273 sacks of sugar (each sack contains 50 kg).
STC has set the retail price of sugar at Rs85.50 per kg and the wholesale price at Rs84 per kg.
Published: 03-03-2017 09:21