KATHMANDU: Sugar prices have not come down even during the crushing season this year due to a ‘cartel’ of sugar factories.
Sugar prices used to come down by Rs 10-15 per kg during the crushing season in the past years. However, the price of sweetener has not come down below Rs 100 per kg this year.
The National Consumer Forum (NCF) has accused factories of keeping a high-profit margin on sugar by controlling market prices. “The cost of production is around Rs 80 per kilogram. This means the price should have come down to Rs 89 per kg,” Prem Lal Maharjan, chairman of the NCF, said. “Retailers in places outside urban centers have been forced to pay as high as Rs 115 per kg.”
Consumers are being forced to pay a high price for sugar due to factors like a lack of sufficient supply, the ill-intention of factories, activities like black-marketeering, and a lack of monitoring by the government mechanism, Shrestha said. “This year sugar factories have formed a cartel and limited supply to the market, taking advantage of weak government mechanisms. That is why sugar prices didn’t come down,” he added.
Maharjan said the Ministry of Industry, Commerce, and Supplies has been acting like a mute spectator while factories control market prices.
Farmers denied minimum support price
Kapilmuni Mainali, chairman of the Nepal Sugarcane Producers Federation, said factories were offering farmers the minimum support price of last year for this year’s purchase. “Farmers are forced to sell canes for Rs 540 per quintal even though the government has set the minimum support price at Rs 565 per quintal,” he added.
The government provides Rs 70 per quintal as a subsidy for farmers. However, Mainali said farmers haven’t even received the subsidy for canes sold in the last season. “Although the budget for 2023/24 states that the subsidy will be paid in the year canes are sold, it is not happening,” Mainali said. “Farmers are suffering from both the factories and the government.”
Crushing for this season began in October and will continue till March or mid-April. “The market price of sugar used to fall in the past years at this time. But this isn’t happening this year,” Mainali added.
According to the federation, sugarcane farming is done in Sarlahi, Morang, Sunsari, Jhapa, Ilam, Udayapur, Siraha, Dhanusha, Mahottarai, Rautahat, Bara, Parsa, Nawalparasi, Kailali and Kanchanpur districts.
Gajendra Kumar Thakur, the spokesperson for the ministry, said they were studying whether factories are controlling market prices by forming a cartel. “We have been warning factories that farmers shouldn’t suffer. The government is serious about this. There won’t be any problem for farmers,” he added.
Although the ministry had proposed to the cabinet to import 60,000 tons of sugar in the current fiscal year, the finance ministry allowed the import of only 20,000 tons. State-owned entities Salt Trading Corporation and Food Management and Trading Company have already imported 10,000 tons each.
India had offered to export 25,000 tons of sugar to Nepal in October last year. However, Nepal didn’t use the quota as India was levying taxes on sugar exports.
