May 26: India has banned export of sugar within days after banning the export of wheat from the country. This move is certain to cause scarcity of sugar in Nepal and result in price hike as the domestic production of sugar is not sufficient to meet the internal demand.

The annual consumption of sugar in Nepal is around 250,000 metric tons while the domestic production is just 140,000 metric tons. The country has been supplying the insufficient amount of sugar through imports.

The Government of India is said to have banned the export of sugar fearing global food crisis due to the Russia-Ukraine war. India is the second largest exporter of sugar after Brazil.

Nepal has been relying on sugar imported from India, Pakistan and other countries to meet the internal demand for sugar. Pakistan has also imposed a ban on export of sugar.

Stakeholders believe that the latest decision taken by India is certain to cause scarcity of sugar and also increase its price in the domestic market of Nepal.

Kapil Mani Mainali, chairman of Nepal Sugarcane Producers Association, said that the ban imposed on export of sugar by India will have a profound impact on Nepal. According to Mainali, the annual demand of sugar in Nepal is around 250,000 metric tons. He informed that the Nepal has produced 140,000 metric tons of sugar this year. He claimed that there will be a scarcity of sugar in the near future due to the ban imposed by India.

As per the latest data of the department of customs, Nepal has imported 89,000 metric tons of sugar so far in the current fiscal year.

Officials of the state-owned Salt Trading Corporation, which sells sugar at subsidized rate, say that it has a stock of 32 tons of sugar left. Salt Trading Corporation has been selling sugar in retail amount so that the stock does not run out.

It has been almost one and a half years since the Salt Trading Corporation sought permission from the government to procure 50,000 metric tons of sugar but the proposal has not been approved yet.

The Salt Trading Corporation has invited tender bids at both international and domestic levels to purchase 10,000 metric tons of sugar. However, the corporation’s spokesperson Kumar Rajbhandari believes that the procurement process will be affected due to the ban imposed by India. He believes that the India’s ban will create a shortage of sugar in Nepal and will also cause an increase  in price.

The retail price of sugar in the local market is between Rs 90 to Rs 95 per kg at present.

Big businessmen and traders are expected to create an artificial shortage of sugar after India imposed such ban, says Amul Kaji Tuladhar, general secretary of Retail Trade Association.