Sugar import restrictions extended till mid-JulyThe government extended import restrictions on sugar by three months even though it had earlier accused sugar producers of fooling it to raise market prices. Three weeks ago, Prime Minister KP Sharma Oli had charged mill owners of using subterfuge to get the government to hike the rates.
The government extended import restrictions on sugar by three months even though it had earlier accused sugar producers of fooling it to raise market prices. Three weeks ago, Prime Minister KP Sharma Oli had charged mill owners of using subterfuge to get the government to hike the rates.
Sugar import limits will now stay in force till mid-July. The government decision was announced through a notice published in the Nepal Gazette dated April 15.
Last September, bowing to complaints from sugar mills that they were being priced out of the market by cheap imports, the government had imposed an import quota of 100,000 tonnes annually. The policy also allowed mills to increase the price of sugar from Rs60 to Rs90 per kg and was to last till mid-April.
According to officials of the line ministry, the Ministry of Industry, Commerce and Supplies, the Cabinet imposed the decision directly without consulting or informing it. “Ministry officials came to know about the government decision only after it was published in the Nepal Gazette,” said the ministry source. Ministry spokesperson Dinesh Bhattarai told the Post that he had no knowledge about the time extension either.
Economist Dipendra Bahadur Chhetri termed the government step inappropriate. According to him, World Trade Organisation rules forbid member countries from imposing such import restrictions during normal times. “A country can implement the measure only if it helps to address a worsening balance of payments situation,” said Chhetri. “It will only benefit a handful of traders while pushing up the price of the essential product.”
Sugar producers had been putting constant pressure on the government to extend import restrictions. Issuing a public notice 10 days ago, they claimed that the country would face a supply glut in the next fiscal year due to this year’s good sugarcane harvest.
According to the Nepal Sugar Mills Association, domestic sugar production is expected to reach 190,500 tonnes during this sugarcane crushing season that usually ends in mid-May. With last year’s unsold stocks, they will have 267,042 tonnes of sugar compared to the country’s annual sugar requirement of 250,000 tonnes.
Consumer rights activists slammed the government’s decision to lengthen the import quotas. Madhav Timilsina, president of the Consumer Right Investigation Forum, suspected the involvement of high level government officials in the possible scam. “The government’s move will help encourage sugar producers to raise the price further which will hit consumers hard,” Timilsina said. The retail price of sugar in Kathmandu is Rs85 per kg.
Sugar producers are still lobbying with the government to increase the price of the sweetener further. The public notice issued by the association claimed that the cost of production had increased by Rs2.30 to Rs72.65 per kg, and that a majority of the sugar mills were operating in the red.
The mills are reluctant to clear the monies owed to sugarcane farmers for their crops. Kapil Muni Mainali, president of the Nepal Sugarcane Producers’ Association, said sugar factories still owed Rs8 billion to the farmers for this season’s harvest.