Amid skyrocketing price of sugar in the market, the government had constituted the three-member panel led by Khila Nath Bastakoti, director of the Department of Commerce (DoC) on January 12 to find out cost of production of sugar produced by local sugar factories. [break]
The committee had submitted the report to the Ministry of Commerce and Supplies (MoCS) a couple of days ago.
Jib Raj Ghimire, under-secretary of the MoCS said the committee has calculated the cost of production of sugar incorporating the sugarcane price, 15 percent inflation, processing cost and administrating cost. Cost of sugar cane for a kg of sugar and other cost of production have been calculated at Rs 4,566 per quintal and Rs 928 per quintal respectively.
The committee found that the recovery rate of sugar from sugarcane stands at nine percent. Price of sugarcane has jumped to Rs 411 per kg from Rs 220 per kg last year due to drop in sugarcane production.
Sugarcane production has dropped to 59,000 tons during 2008/09; sharp fall around 100,000 tons a year earlier. Demand of sugar across the country is estimated to hover around 150,000 per year.
“Producers have fixed factory gate price including profit at Rs 65 per kg which excludes Value Added Tax (VAT). “The report showed that sugar producers are setting factory gate price of sugar with over 20 percent profit which is well as compared to production cost,” said Ghimire. Sugar producers are selling sugar to the government at factory gate price of Rs 65 per kg excluding VAT.
Out of the nine sugar mills operating across the country, the study committee had visited and took stock of production as inventory of five sugar mills-Shri Ram Sugar Mill, Indu Shankar Sugar Mill, Everest Sugar Mill, Lumbini Sugar Mill and Eastern Sugar Mill.
Sugar price drops by Rs 10 kg
With the government selling sugar through STC and NTL´s outlets, private traders have lowered the price of sugar by Rs 10 to Rs 80 per kg. Local sugar mills have pledged to sell 5,000 tons of sugar to the government. They have sold 4,000 tons to State-owned Salt Trading Corporation (STC) and National Trading Ltd (NTL).
Pabitra Bajracharya, president of Nepal Retailers Association said private traders are selling sugar to whole sellers for Rs 78 per kg.
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