Govt mulls halting sugar import

Kathmandu, August 29

In a bid to ensure market for domestic sugar, the government is preparing to enforce ban on its import for a certain period of time.

Amid cheaper sugar from India and Pakistan flooding the market, country’s sugar mills have been finding it difficult to clear their stocks as Nepali sugar, which is comparatively costlier, has failed to compete with imported cheaper sugar.

In this backdrop, the Ministry of Industry, Commerce and Supplies (MoICS) has tabled a proposal at the Cabinet recently to halt import of sugar for a certain time until the country’s stock of sugar has been cleared, informed an official at MoICS seeking anonymity.

“During our inspection, we found out that the local sugar mills are facing difficulty in clearing their stocks. Thus, we have recommended halting import of sugar for a certain period,” said the official.

Meanwhile, a study committee formed under the coordination of Nabaraj Dhakal, joint-secretary at MoICS, a few weeks ago had also suggested the government to halt sugar import and further raise import duty on the product to assure market for Nepali sugar.

In March, the government had raised import duty on sugar to 30 per cent from 15 per cent amid pressure from the sugar mill operators. Sugar mill operators had been pushing the government to raise import tax on sugar citing that they were not only having a hard time in clearing sugar stocks due to the increasing flow of low-cost sugar but were also unable to clear payments to sugarcane farmers.

However, the move to raise the import tax on sugar has largely failed to make a notable impact on the market.

Sugar mill operators have been claiming that sugar worth more than Rs seven billion remains unsold at their warehouses after failing to compete with the foreign brand. Of the 178,000 tonnes of sugar produced in the country last year, Nepal Sugar Mills Association (NSMA) has claimed that only 60,000 tonnes of sugar have been sold so far.

“The production cost of Nepali sugar is much higher compared to its production cost in India and other countries. Halting sugar import completely for some time will give relief to sugar mills and ensure that sugarcane farmers get their payment on time,” informed Rajesh Kedia, general secretary of NSMA.

Meanwhile, it is to be noted that though banning imported sugar will give relief to sugar mills and sugarcane farmers, consumers will be obliged to pay more for it in the domestic market. Currently, sugar is available at Rs 70 per kilogram. However, sugar price is expected to rise once the government enforces ban on sugar import.