Nepal Struggles to Celebrate Festivals Due to Sugar Shortage

Kathmandu, Oct 20 The Nepalese people are having a hard time celebrating Vijaya Dashami and Diwali this year as the country is hit by a shortage of sugar because of low production and India's export ban ahead of the festive season. Nepal’s annual demand for sugar stands at 300,000 metric tonnes and the domestic production is just 120,000 metric tonnes.

India's Export Ban and Nepal's Request

This year, India banned the export of sugar and rice to fulfill its domestic demand. However, it recently eased the export of non-basmati rice to Nepal providing a big relief to the country. Welcoming India’s decision to ease the export of rice to Nepal on Wednesday, Senior Vice President of the Federation of Nepalese Industries and Commerce FNCCI, Anjan Shrestha, has requested India to do a favour for Nepal by easing its export of sugar too.

"Grateful to@piyushgoyal for easing rice import from Nepal, a lifeline for our food security,” said in a tweet, thanking Indias Minister of Commerce & Industry, Consumer Affairs & Food & Public Distribution and Textiles. "Urgently appeal to ease the import of sugar from Nepal too,” he wrote, adding, "People are enduring hardship during festivals without it. Please consider their plight.”

Sugar Smuggling and Black Market

On July 20, the Indian government banned exports of non-basmati white rice to boost domestic supply and keep retail prices under check during the upcoming festive season. There also have been reports about growing incidents of smuggling of sugar from India to Nepal following the government of India’s decision to ban exports.

People are queuing at the Dashain Bazaar run by the semi-government entity Salt Trading Corporation in the outskirts of Kathmandu to get 2 kg of sugar at a subsidised price of Rs.97 per kg. Currently, sugar is traded for something between Rs 150 to Rs 160 per kg in the black market in the capital city. A few months ago sugar was priced at Rs. 85 per kg in the local market.

Government Measures and Industry Woes

The Nepal government has, however, initiated a tender process to import 20,000 metric tons of sugar from a third country during the festival season to overcome the shortage to some extent, according to officials. The government has also reduced import duty on sugar from 40 per cent to 30 per cent. Besides the general public, some of the big industries in Nepal, whose production is based on sugar, are also facing problems due to the scarcity.

"It is very difficult to operate our industry due to the shortage of sugar,” Abhaya Gorkhalee, marketing head of Dabur Nepal, a subsidiary of Dabur India told . Dabur Nepal is the major Indian joint venture in Nepal producing Real juices, Dabur Honey, Dabur hair oil and other herbal cosmetic goods among others. More than 50 per cent of Real Juice produced by Dabur Nepal is exported to India.

The sugar shortage in Nepal has put a damper on the festive spirit of the Nepalese people. The government's efforts to import sugar from a third country and reduce import duty may help alleviate the shortage, but it remains to be seen whether these measures will be enough to meet the country's demand for sugar during the festive season.