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Kathmandu Thursday June 28, 2001 Ashadh 14, 2058.
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Govt to import sugar
Tariff likely to be slashed
Post Report
KATHMANDU, June 27 - With an aim to bridge the recurring
sugar deficit, the government has decided to import a substantial amount of sugar, in
addition to reduce the current import tariff level.
Concerned officials at the Ministry of Industry, Commerce and
Supplies informed The Kathmandu Post that the government has initiated homework to make
necessary arrangement for importing 50 thousand tons of sugar. The final decision is
likely to be announced within a week.
In addition, the government is also working to reduce the
duty in the import of sugar. The latest decision comes as a major policy reversal of the
government, that in January 2000, had slapped 40 per cent import duty in sugar to protect
the domestic sugar industries.
The government then had taken the protective step against
sugar dumping in Nepal from some of the South American states, in addition to China and
Thailand. With most of the major sugar producing countries in the world supplying sugar to
the international markets at a low rate, the decision had come as a relief to domestic
sugar industries that were facing stiff competition with the imported sugar. The import
tariff, at the request of sugar entrepreneurs, was first raised from 10 to 25 per cent in
July 1999, and then to 40 per cent seven months later.
Though top government officials assert that the current stock
of sugar is enough for coming two months, they agree that the country might face
sugar-crunch during October-November, when the Hindu festivals Dashain and Tihar falls.
Nepal has traditionally been facing sugar shortage during
Dashain and Tihar each year, primarily due to strained supply and soaring demand. The
market had faced sugar shortage during the previous festivals last year even after the
government temporarily banned the export of sugar. Officials had termed the ban as a
precautionary measure to meet the heightened demand. Sugar demand during Dashain and Tihar
soars by over 50 per cent.
According to government statistics, Nepal is presently a
sugar sufficient country with an average annual production of around 140 thousand tons.
However, total production last year had been only 125 thousand tons, which officials claim
would be for the current fiscal year, too. The total output of the eleven sugar industries
of the country in the current year was initially projected to soar above 150 thousand
tons, but could not be achieved due to a multiplicity of factors.
Among them were the wrangling between the farmers and sugar
mills over the procurement price of sugarcane which resulted in months long closure of
some sugar mills since last September.
Attributing an increase in the costs of agriculture inputs,
including fertilizers, on which the government subsidy was scrapped last year, labour, and
transportation, due to increased fuel costs, the agitating farmers were demanding an
increase in the sugarcane procurement price, which was settled amicably finally. Another
factor affecting production was the short supply of sugarcane - the main
raw material in sugar production - primarily due to adverse weather conditions.
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