Sugar prices surged significantly during Dashain, affecting millions of consumers this year. With higher sugar consumption anticipated during Tihar, concerns have arisen about potential price hikes for the upcoming festival.
Contrary to these fears, officials predict a drop in sugar prices during Tihar. Agencies such as the Food Management and Trading Company (FMTC) and the Salt Trading Corporation are importing sugar in large quantities, benefiting from a 50 percent customs discount, which is expected to increase supply and reduce costs.
These organizations plan to import 30,000 tons of sugar under this customs exemption. Currently, sugar imports are subject to a 30 percent customs duty and a 13 percent value-added tax (VAT), totaling nearly 47 percent. A reduction in the customs duty to 15 percent could lead to significant savings for consumers.
According to the Department of Customs, officials estimate that a 50 percent reduction in customs duties could lower sugar prices by up to Rs 13 per kilogram. However, since transportation costs and other expenses will remain unchanged, the exact price adjustment remains uncertain.
Nevertheless, officials indicate that sugar imported under the customs exemption is likely to cost less than Rs 100 per kilogram. A new price cannot be established immediately as the sugar has not yet arrived in Nepal. Private traders claim that if allowed to import under the customs exemption, they could sell sugar for Rs 99 per kilogram.
Currently, market prices for sugar have reached up to Rs 120 per kilogram. The FMTC is selling sugar at Rs 102.50 per kilogram, including a Rs 5 discount for the festival season. The Salt Trading Corporation lists a 2-kilogram packet for Rs 225, while Bhat-Bhateni sells sugar at Rs 108 per kilogram.
In comparison, sugar prices in neighboring India are significantly lower, with refined sugar priced between INR 31 to 37 per kilogram in Gorakhpur. Even at the highest rate, 1 kilogram of sugar can be obtained for about NRs 59.
