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Mill operators raise sugar price citing rise in cost of sugarcane

Sugar mills in the country have raised the price of sugar citing the rise in the price of sugarcane.

Citing that the government fixed the price of cane for the ongoing fiscal year at a high rate, which is unbearable for them, sugar mill operators have increased the factory price of the sweetener from Rs 63 per kg to Rs 78 per kg. This means that the retail price of sugar, which is currently around Rs 80 per kg, will reach Rs 90 per kg.

As per the government’s decision made last week, sugar mills will have to pay at least Rs 471 per quintal of sugarcane to farmers while the government will pay farmers Rs 65 per quintal as subsidy. However, sugar mills had been pressurising the government to raise the minimum price of sugar citing that they will not be able to pay farmers aforementioned rate.

“Purchasing sugarcane from farmers at the government set rate will not raise even production cost of sugar mills. We have to purchase cane from farmers at Rs 471 per quintal which has compelled us to increase the price of the sweetener,” said Sashi Kanta Agrawal, president of Sugar Producers’ Association of Nepal.

Meanwhile, government officials have said that sugar mills should not raise the price of sugar arbitrarily. “We can hold discussions on reviewing the price of sugar which is being produced through sugarcane being purchased now as the rise in cane price directly affects the price of sugar,” said Yogendra Kumar Gauchan, director general of the Department of Commerce, Supply and Protection of Consumers. “However, selling sugar that had already been produced before the government set the new cane price at a high price in the name of rise in sugarcane price will not be excused.”

Every time the government fixes cane price, sugar mill operators have been opposing the government’s rate and the government has time and again addressed sugar mills’ demands through various means.

A few months ago, the government had fixed an import quota of 100,000 metric tonnes of sugar for this fiscal on the request of sugar mill owners as they had been complaining that the stock of sugar produced by local sugar manufacturers was not finding a market due to cheaper imports. Prior to this decision, the government had also raised the import duty on sugar to 30 per cent from 15 per cent to discourage foreign sugar, which is comparatively cheaper.

Meanwhile, consumer rights activists have said that the government should not allow sugar mills to raise sugar price at any cost. “Sugar mills are always searching for ways to raise price. As they have enough stock of old sugar, they cannot raise sugar price citing the rise in cane price,” said Madhav Timalsina, president of Consumers’ Right Investigation Forum.

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