Nepal may approach Pakistan for sugar import

Due to issues ranging from quality to pricing, the process of importing sugar in a government-to-government deal to meet the Tihar festival demand has been deferred.

Krishana Prasain

Krishana Prasain

The Kathmandu Post


File photo of a handful of sugar. PHOTO: THE KATHMANDU POST

November 14, 2023

KATHMANDU – With the Indian government quoting a high price for sugar, which Nepal plans to import through a government-to-government arrangement, top Nepali government officials said they may approach Pakistan for the sweetener if India’s offer doesn’t prove sweet enough.

Due to issues ranging from quality (small crystal sugar) to pricing, the process of importing sugar in a government-to-government deal to meet the Tihar festival demand has been deferred, sources privy to the matter told the Post.

Nepal’s annual sugar requirement is around 270,000 tonnes.

The country faces an annual deficit of about 100,000 tonnes of the sweetener, which is fulfilled through imports by the private sector and sometimes by two government companies.

The annual import of sugar is worth nearly Rs3 billion, according to the Department of Customs.

On November 2, New Delhi allowed the export of 25,000 tonnes of sugar on a quota basis to Nepal till September 30 next year, as Nepal is struggling to meet the demand.

The price of sugar, which was Rs75 per kg in the retail market a few weeks before the Dashain, surged to Rs130 per kg after India’s export restriction.

The price has jumped to Rs160 per kg and the commodity is not easily available in the market, traders say. The shortage did not subside in Tihar too, even after the government’s commitment.

Consumers faced hardship as sugar was not easily available in the market even after setting a record high price during Nepal’s key festive season.

Dashain, Tihar and Chhath are key festivals in the country when sugar is consumed more, mainly to make sweets.

Traders charged that the government’s mechanism failed to import sugar even after committing to do so.

“The Indian government has offered to provide S30 sugar from Gujarat, which is of inferior quality. The size of the crystals is very small,” said Gajendra Kumar Thakur, joint secretary at the Ministry of Industry, Commerce and Supplies. “The first issue was the quality. And second, it was not possible to import sugar from Gujarat in a short period which resulted in a shortage in Tihar,” said Thakur.

The S30 is the most common white refined sugar.

On November 2, India’s Ministry of Consumer Affairs, Food and Public Distribution allowed the export of 25,000 tonnes of sugar to Nepal.

Subsequently, the Nepal government decided to import 20,000 tonnes from the 25,000 tonnes quota it was given, through a government-to-government arrangement.

The government’s supply bodies—Salt Trading Corporation and Food Management and Trading Company—were assigned to import 10,000 tonnes each.

Thakur said it takes six days to import sugar from Gujarat.

Officials, however, said that due to the differences in the price, the import process has been delayed.

According to officials, the price offered by the Indian government is 25 percent higher compared to the existing price.

“We are in negotiations with the Indian side as the deadline to import sugar is one year. We are negotiating on price and quality,” said Thakur.

Officials at the industry ministry said that they could import medium crystal sugar from Pakistan as prices are comparatively cheaper.

Under the government-to-government arrangement, India has assigned its supply body National Cooperative Exports Limited to export sugar.

According to Thakur, as sugarcane harvest has started, supply will improve in the market soon. The domestic production will last for six months, he said.

On Sunday, the Salt Trading Corporation increased the price of sugar. The corporation, which was selling the sugar at Rs97 per kg before the Dashain festival, raised the price to Rs115.50 per kg.

The corporation has increased the quota to retailers and restaurateurs, allowing them to purchase 50 kg at a time from its official premise at Kalimati. Earlier, it was providing 2 kg of sugar at the subsidised rate from its different outlets in Kathmandu.

Even though Salt Trading Corporation is providing sugar, people have to wait in long queues.

The five-day Tihar festival started on Saturday.

The festival of lights is celebrated with sweet treats as people prepare different sweet dishes like Nepali doughnuts among others to offer the Laxmi and give it to brothers on Bhai Tika, the fifth day of Tihar.

The sugar shortage in Nepal occurred after India’s Directorate General of Foreign Trade, on October 18, extended the restriction on sugar exports beyond October 31.

Following India’s move, Nepal’s Ministry of Industry, Commerce and Supplies asked for permission to import 60,000 tonnes of sugar in August to meet the anticipated festival demand.

However, the finance ministry delayed approval for the import. It issued permission on September 13, just a month ahead of the Dashain festival, causing a shortage of sweeteners in the country.

Due to the delay in import approval and bidding process, neither Salt Trading nor Food Management and Trading Company could not bring sugar on time.

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