Import bill of sugar that entered the country from the dry port in Sirsiya, Birgunj surged by about 81 percent in the first nine months of the current fiscal year following hike in supplies from Pakistan and Bangladesh, where production of the commodity has soared.

Nepal imported 83,875.7 tonnes of sugar worth Rs4.7 billion via the Inland Clearance Depot (ICD) in Birgunj in between mid-July and mid-April, data provided by ICD Birgunj show. The country imported 38,643.5 tonnes of sugar worth Rs2.6 billion from the ICD in the same period a year ago.

Most of the imported sugar came from Pakistan, according to Dhan Bahadur Baruwal, information officer of ICD Birgunj. Sugar imports from Bangladesh and Canada also rose in the nine-month period, Baruwal said.

“Pakistan and Bangladesh saw a surge in sugar production this year. These two countries exported a big portion of the commodity at low prices to shore up their foreign exchange reserves,” said sources. Cheap imports have definitely benefited consumers. In Birgunj, for instance, sugar can be bought at Rs68 per kg.

Importers had earlier said sugar prices could further go down if the government revised its reference price for imported sugar. The Department of Customs has set sugar reference price at $460 per tonne. This means taxes on sugar imported from abroad would be levied assuming each tonne of the commodity was purchased at $460 in the international market. However, importers claim sugar price in the international market is lower than the government’s reference price and have sought permission to pay taxes accordingly. The ICD has released such consignments at valuations declared by importers, but only after collecting security deposit. This condition will allow the government to collect taxes as per its reference price at a later date if it finds prices declared by importers were not genuine. Entry of sugar at below the customs reference price is also one of the reasons for drop in sugar prices in the domestic market. But this has posed a serious threat to domestic sugar producers, who are facing difficulties in competing with cheap overseas product. Earlier, sugar producers had demanded that the government increase import duty on sugar to prevent cheap product from flooding the market.

On Tuesday, the government raised the import duty on sugar from 15 percent to 30 percent.