The factory gate price was fixed after negotiations between the representatives of Nepal Sugar Mills Association (NSMA) and Federation of Sugarcane Producer Farmers (FSPF) on Saturday.[break]
"We have directed all sugar mills to procure sugarcane from Sunday and immediately resume production of sugar as farmers have agreed to supply fresh sugarcane harvest to mills at factory gate price of Rs 411.50 per quintal," Shashi Kant Agrawal, president of NSMA told Republica after the meeting.
Last year, sugarcane procurement price was fixed at Rs 401 a quintal.
Due to delay in procurement of sugarcane and beginning of sugar production in the new season over persisting price row, black-marketeering in sugar is rife in the market. Sugar price jumped to Rs 75 per kg this week from Rs 68-70 per kg a week back.
Sugarcane farmers who were agitating over three-point demand including fixation of sugarcane procurement price at Rs 450 per quintal and a timely payment of their dues by the mills held up the fresh supply of sugarcane. Sugar mills were compelled to delay their production schedule due to shortage of sugarcane, a key raw material for making sugar.
"Though we were pressing for sugarcane price to be fixed at Rs 450 per quintal, we have no option but to compromise and agree at Rs 411.5 per quintal as mills are not ready to offer the price we proposed. We couldn´t wait further as sugarcane crop is wilting in the farms causing more loss to farmers with each passing day," said Kapil Mainali, president of FSPF.
He said farmers are ready to begin harvesting the sugarcane from Sunday to ease supplies to sugar mills. Currently, there are eight sugar mills under operation in the country.
This year, Agrawal said production of sugar is estimated to go up significantly as there has been a bumper production of sugarcane. Last year, around 150,000 tons of sugar was produced against an annual demand of around 180,000 to 200,000 tons in the country.
The government estimated the sugar production in 2011 to grow by 13 percent to 2.93 million tons.
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