September 18: Consumers of Kathmandu, who are forced to pay as much as Rs 135 for one kilogram of sugar, may not believe that they can get that much sugar for just Rs 70 in the border area markets including Birgunj. How can they believe when the factory price of the sugar produced in the domestic market has now reached Rs 95 per kg. Traders said that some industrialists even charge up to Rs 115 per kg.
The traders say that adding the rent and their profit, the price of sugar in the main cities including Kathmandu will reach around Rs 150 per kg. On the other hand, consumers in the border areas are buying sugar at much less price thanks to the illegally imported sugar from India.
"Sugar produced in the domestic industry of Nepal is not sold in the border areas with India because the traders are selling sugar smuggled from India at a cheaper price. Sugar produced in the country is sold in areas other than the Terai," said Rajesh Kedia, owner of Indushankar Sugar Industry.
The retail price of sugar in the Indian market is Rs 64 per kg (INR 40). The "carriers" charge Rs 4 per kilo and brings it to the Nepali market in border areas. Smuggled sugar has reached even Kathmandu, Pokhara, Hetaunda and other cities and rural areas.
The smugglers are believed to deliver illegally imported sugar to different cities in coordination with the security personnel posted in the border areas. Sugar imported from India at throw-away price is sold at high rates in p laces other than the border areas.
The domestic production of Nepal cannot meet the demand for sugar in the country. According to the Sugar Producers Association, the domestic sugar industries produced 176,500 tons of sugar by crushing 188 million quintals of sugarcane in the fiscal year 2079/80. The domestic market demand is around 300,000 tons. India has banned the export of sugar. The Government of Nepal has not imported sugar for two years. Taking advantage of this opportunity, sugar illegally imported from India is being sold at high prices in Nepal.
The operators of Indushankar Sugar Industry say that the price of a 50 kg sack of sugar is Rs 5,500. According to this calculation, the maximum price of one kg of sugar is Rs 110.
After the Department of Commerce, Supply and Consumer Protection made it mandatory to keep the price on the label, the industries have started writing the maximum price on the bag since last month.
Kedia says that if the department monitors on the basis of these prices, then the black marketing of sugar will be controlled. He claimed that the industry takes only the factory price, which is around Rs 95 per kilo.
“We are eager to know who benefits from the inflated price. But all the blame is put on our heads as if we are responsible for the price hike,” said Kedia.
Only recently, the Ministry of Finance has given permission to the Salt Trading Corporation and the Food Management and Trading Company to import subsidized sugar at the rate of 10,000 metric tons each. However, even if import of sugar is allowed targeting major festivals like Dashain, Tihar and Chhath, there is no possibility of sugar arriving before Dashain as there is only about one month left for Dashain.
There is no uniformity in the price of sugar in Kathmandu. According to the information given by the Retail Trade Association, the retail price of sugar in Kathmandu is Rs 130 per kg. However, it has been found that it differs from one shop to another.
In Thapathali, Bagbazar, Putlisadak, Babarmahal and Baneshwar areas of Kathmandu, the price of sugar ranges from Rs 110 to Rs 135 per kg. Consumers complain that when they go to buy sugar, most of the shops return the consumers empty-handed saying that they do not have sugar, and some of them do not sell even though they have sugar. Kishore Malla, who came to buy sugar at a shop in Putlisadak on Sunday, complained that he could not get sugar easily in the market. He said that he had to visit five to six shops to buy a kilogram of sugar.
The Department of Commerce, Supply and Consumer Protection, which is tasked with market monitoring, has expressed its helplessness regarding the arbitrary price of sugar in the market ahead of the major festivals. The department admitted that it could not increase market monitoring due to various reasons.
Acting Director General of the Department, Anand Pokharel, admitted that the lack of monitoring has increased the morale of businessmen.
Market monitoring has not been effective due to the lack of coordination between the local government, the state government and the district administration office. Taking advantage of this situation, the traders might have increased the price arbitrarily.
Meanwhile, the Industry and Commerce and Labor and Consumer Affairs Committee of the Parliament has instructed the Ministry of Finance to provide tax and customs exemptions on sugar imports. A meeting of the committee on Sunday instructed the ministry to give consent for the import of 50,000 metric tons of sugar demanded by the Ministry of Industry, Commerce and Supplies.
Chairman of the committee, Abdul Khan, informed that the government has been instructed to ease the supply arrangements and distribute sugar at subsidized prices by controlling prices and discouraging 'carteling' to prevent shortage of essential commodities such as sugar, rice, and wheat during the upcoming festivals.
The meeting instructed the Ministry of Industry to make the monitoring effective with adequate manpower and resources and to prevent irregular activities such as adulteration, artificial shortage, black marketing, hoarding, and unnatural price hike.