As the government failed to import sugar and also prohibited the private sector from importing the essential ingredient, the production of the chocolate and biscuit industries ended up shrinking to 50 percent of their full capacity.
The retail price of sugar in the Indian market is Rs 67 per kg while it costs as much as Rs 125 per kg in Nepal. Due to the open border, although sugar is smuggled into the Terai districts from the Indian market, there is a shortage of sugar in other districts.
After the government increased the customs duty on sugar imports two years ago upon the request of the sugar industry, the country has not imported sugar through the green channel of customs. Due to the lack of sugar, industries have cut production by up to 50 percent. The production of biscuits, dairy products, sweets and chocolate industry, which are sold more during the festivals, reduced by 50 percent.
The industries were operating at less than 40 percent of their capacity due to lack of demand in the market. But they increase their production during the festive season to cover up the expenses throughout the year. However, it was not possible this time due to the short-supply of sugar.
Mahesh Jaju, former president of Morang Trade Association and producer of juice, biscuits and confectionery said that the industries could not increase their production during the festival due to the lack of timely supply of sugar which he blamed on the government. According to him, the production of biscuits, chocolates, sweets and confectionery, which are widely used as the main food during the festivals, normally increases during this time of the year.
Rakesh Surana, president of Industry Association of Morang, recalled that former Prime Minister KP Sharma Oli, when he was the prime minister, had declared the country to have become self-sufficient in sugar, but his claim turned out to be false.