September 10: The government's stock of sugar has been empty for almost a year. The government has handed the responsibility of import and distribution of sugar to the Salt Trading Corporation (STC) and Food Management and Trading Company (FMTC) Limited.
Although the STC and the FMTC have repeatedly asked for permission from the government to import sugar, the Ministry of Finance has not granted the permission.
As a result, the state-owned companies have run out of stock of sugar since one year.
Officials of these bodies say that they have not been able to import customs duty-free sugar for three years.
Deputy General Manager of the Salt Trading Corporation, Kumar Rajbhandari, said that their efforts to import duty-free sugar were not successful due to non-cooperation from the Ministry of Finance.
“The festive season is approaching. Therefore, with a view of Dashain and Tihar in mind, we sent a letter to the Ministry of Industry, Commerce and Supplies seeking permission to import 50,000 metric tons of sugar. The ministry also needs to get approval from the finance ministry. It has been more than a month since the letter was sent to the Ministry of Finance, but there has been no response yet," he told New Business Age.
Even during last year’s Dashain, when Salt Trading Corporation asked for permission to import customs exempted sugar, the import process was canceled after the Finance Ministry ignored it.
Rajbhandari says that when the stock of 20,000 metric tons of sugar brought by the Salt Trading Corporation ran out of stock three years ago, they stopped selling sugar in bulk in the wholesale market and sold sugar only in retail for two years. The Salt Trading Corporation’s sugar stock has been completely empty since last Dashain.
It has been almost a month since the FMTC also sought approval from the Ministry of Finance to bring 10,000 metric tons of sugar this year targeting the upcoming festivals. FMTC officials say that there has been no response from the Finance Ministry. The company says that even if the government gives approval now, it is not possible to import sugar before Dashain.
In general, 20,000 metric tons of sugar is consumed in Nepal every month. An additional 30,000 metric tons is demanded during the festivals of Dashain and Tihar, which begins from October 15 this year.
According to the Sugar Producers Association, sugar production in Nepal has decreased this year. This year, only 100,000 metric tons of sugar has been produced. The market demand in Nepal is 280,000 metric tons annually.
Dhaniram Sharma, spokesperson for the Ministry of Finance, informed New Business Age that although the file regarding the approval of sugar import has been submitted to the ministry, the ministry is yet to take any decision on the matter yet.
According to him, the ministry is busy studying the current market price, the demand of the domestic market and the sugar production in Nepal this year. This has delayed in issuing the permission to procure sugar, said Sharma.
Due to the uncertainty over whether subsidized sugar will come or not, there is likely to be a shortage of sugar in the market ahead of the Dashain and Tihar festivals. It is suspected that the traders may engage in black marketing.
According to Madhav Timilsina, president of the Consumer Rights Research Forum, the price of sugar, which was Rs 88 per kilogram a month ago, has increased to Rs 114 in the market now.
