Salt Trading to buy 20,000 tonnes of sugar for buffer stockSalt Trading Corporation has decided to buy 20,000 tonnes of sugar from domestic producers with the objective of maintaining intervention stocks. It will sell sugar from its stores to stabilise market prices if they should fluctuate widely.
Published at : January 22, 2019
Updated at : January 22, 2019 08:48
Salt Trading Corporation has decided to buy 20,000 tonnes of sugar from domestic producers with the objective of maintaining intervention stocks. It will sell sugar from its stores to stabilise market prices if they should fluctuate widely.
The state-owned company has planned to maintain a buffer stock through the new purchase with sugar mills mulling to increase prices. It currently has 8,000 tonnes of sugar in stock. Corporation spokesperson Kumar Rajbhandari said they planned to purchase sugar from domestic producers. According to him, a tender notice was issued last week.
There are 14 sugar mills operating in the country. They claim that they have 40,000 tonnes of unsold sugar in their warehouses.
Last year too, the corporation had attempted to purchase sugar from domestic producers, but the plan was dropped because of the high prices quoted by the bidders. Due to this reason, the corporation was compelled to import sugar from India, said Rajbhandari.
Last year, the corporation imported 50,000 tonnes of sugar from India, half of which is still stuck at Birgunj Dry Port due to the quantitative restriction on sugar imports imposed by the government last September. Rajbhandari said they were in talks with the Finance Ministry to have the shipment released. “Unlike in the past when the government used to provide funds to import sugar, we are spending our own money to buy the essential product this time.”
The government has enforced a number of measures one after the other in favour of sugar producers. Previously, it doubled the import duty on sugar to 30 percent following complaints by mills that they were being priced out of the market by cheap imports. This was followed by the imposition of import quotas. Now the public enterprise has decided to purchase sugar from the mills to help them get rid of unsold stocks. Sugar mills have been trying to increase the price of the sweetener. They want to jack up the retail price to Rs78 per kg from the existing Rs63 per kg which will hit consumers hard.
Sugar factories said they needed to hike prices as the government has raised the floor price of sugarcane. Two weeks ago, the government increased the floor price of sugarcane to Rs536.56 per quintal, which is the lowest price farmers can be paid for their crops.
Nepal’s sugar requirement amounts to 250,000 tonnes annually. Domestic production is barely sufficient to fulfil the requirement.