Saturday, January 12, 2019

Producers demand sugar price hike, stops crushing cane

Manufacturers have proposed the government to hike sugar price by atleast Rs 10 per kg, after the government’s move to raise the floor price of sugarcane. They have even stopped crushing the crop opposing the government move. The government has set the floor price of sugarcane at Rs 536.56 per quintal, which has – according to the mill owners – made sugar expensive. They have thus demanded minimum price of sugar to be fixed at Rs 90 per kg.
According to the Cabinet decision last week, sugar factories have to pay Rs 471.28 to farmers for a quintal of cane while the government will pay the farmers Rs 65.28 per quintal as subsidy. However, the manufacturers have rejected to purchase the cane at the government price and asked upward revision of the minimum price.
It has been a month since the sugarcane was ready to be harvested but the standoff have left farmers worrying as their crop have started to dry waiting for the factories to buy and process cane.
"If the government increases the minimum price to Rs 90 per kg from the current price of Rs 70 per kg, we will immediately purchase the cane from farmers and start producing sugar,” according to the sugar producers. "We have stock of 3,000 tonnes of sugar at our warehouse," they said, adding that they have to sell it before they can pay farmers. "Last year, we took a bank loan to pay the farmers and suffered a loss of Rs 200 million after we couldn’t sell the sugar."
They also claimed that the market was flooded with cheap sugar from Pakistan last year and they could not sell their sugar. "Out of 178,000 tonnes of sugar produced in Nepal last year by the 11 sugar mills operating in the country, some 70,000 tonnes still remain to be sold."
The government started fixing the floor price of sugarcane from last year to end the constant confrontation between sugarcane farmers and sugar producers. The government had announced in its budget for the current fiscal year that it would fix the reference prices of key agricultural products to encourage farmers.

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