Sugar shortage looms while government delays decisionThe ministry has proposed to import sugar to forestall any possible scarcity during Dashain and Tihar.
Sugar may be in short supply during the upcoming festival as the government is taking its time making a decision on imports of the household sweetener.
The Ministry of Industry, Commerce and Supplies said it had sent a proposal to the Cabinet to import 30,000 tonnes of sugar through Salt Trading Corporation or National Supply Company, a new state-owned enterprise formed by merging Nepal Food Corporation and National Trading Limited.
The ministry has proposed to import sugar to forestall any possible shortage during Dashain and Tihar when demand swells tremendously, outstripping domestic production.
Kedar Bahadur Adhikari, former secretary of the ministry who has recently been transferred, said the ministry had registered a proposal in the Cabinet but it was yet to reach a decision.
Dashain, the biggest Hindu festival, starts in October, and any delay in reaching a decision could affect timely supply of sugar, said government officials. “We have not yet received any official letter to import sugar,” said Kumar Rajbhandari, spokesperson for Salt Trading Corporation.
According to Rajbhandari, it takes at least a month to open a letter of credit and call for tenders from interested companies to supply the product. “We are pressed for time, and it does not look like shipments will arrive in time for the upcoming festivals even if we start the procurement process right away,” he said.
Salt Trading Corporation says it has only 2,500 tonnes of sugar in stock. The sugar requirement jumps to 25,000-30,000 tonnes during the one-month period when the Dashain and Tihar festivals occur, Rajbhandari said.
The usual monthly requirement is 15,000 tonnes.
Last year, the corporation suffered a loss due to the late
decision of the government. Almost 2,500 tonnes of sugar imported by the corporation
was stranded at the dry port in Sirsiya due to import restrictions placed by the government.
Salt Trading could not receive customs clearance for the imported sugar after the import quota of 100,000 tonnes went into effect on September 17. As a result, the corporation incurred a loss of Rs60 million on the consignment. “We were able to clear the shipment through customs only a few months ago, and were forced to bear a loss of Rs20 per kg,” Rajbhandari said.
The government raised the customs duty on sugar to 40 percent from 30 percent through the budget statement for fiscal 2019-20. “The ministry this year has also requested the government to reduce the duty on imports made by public enterprises, but no decision has been made yet,” said Navaraj Dhakal, spokesperson for the ministry.
The government has also been delaying decision on whether or not to remove import restrictions. Bowing to pressure from domestic sugar mills, it had extended the restriction by three months until mid-July.
Factory owners have been urging the government to extend the deadline till the end of the festival season. The ministry source said the government was considering the matter and had not made a decision.
“Sugar mills have been pressuring the government to allow only limited imports by state-owned corporations for the festivals while continuing the restriction on imports by the private sector,” said an anonymous official of the Department of Commerce, Supply and Consumer Protection Management. “This will allow domestic mills to continue their misconduct during the festivals,” the source said.