Panel report on sugar mills overcharging to be reviewed

- Post Report, Kathmandu
Salt Trading Corporation retails sugar at Rs82 per kg while consumers pay up to Rs100 per kg

Jun 14, 2017-Consumers continue to suffer due to wide variation in retail prices for sugar, but the Ministry of Supplies has been considering revising a panel report revealing overcharging by sugar factories instead of moving against them.

The ministry on Monday decided to review the report presented by a panel formed to investigate wide variation in sugar prices. The study found out that the production cost of sugar ranges from Rs55.50 to Rs65.09 per kg. Sugar factories have been adding a markup of 26 percent to their products. 

Salt Trading Corporation (STC) sells sugar at Rs82 per kg retail. However, consumers are being forced to pay up to Rs100 per kg.  There are 11 sugar mills operating 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.

Supplies Secretary Prem Kumar Rai said the ministry had begun to revise the report following complaints by sugar manufacturers. “Producers said that mistakes were made when calculating the production cost, and they have urged the ministry to make a revision,” Rai said. 

According to Rai, the wide variation in retail prices is due to short supplies, and the ministry is planning to maintain price stability by boosting supplies from the government side. “That’s why the government has moved to import adequate quantities of sugar through STC,” he said. 

STC has planned to import 50,000 tonnes of sugar by mid-October, almost double the quantity it usual imports annually. The government-owned enterprise has imported 7,500 tonnes of sugar so far. 

Private sugar mills are reported to be pressurising the government to increase the price of sugar being sold by STC.  “It is inappropriate that the government attempts to revise its own report based on the opinion of some private companies,” said Prem Lal Maharjan, president of the National Consumer Forum. 

“If the companies have said that they reported the wrong production costs, it is just an excuse to continue overcharging customers,” said Maharjan.

The committee formed last month under Niraj Giri, director of the Department of Supplies Management (DoSM), includes Anjana Pokharel, chartered accountant of Nepal Oil Corporation, Achyut Raj Tiwari, chartered accountant of Nepal Sugar Mills Association, Durga Prasad Bhusal, director of the Department of Industry, Niroj Ghimire, officer of the DoSM and Prem Lal Maharjan, president of the National Consumer Forum, as members. 

Published: 14-06-2017 08:11

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