Thursday, July 25, 2024

Sweet to Scarce: The Sugar Shortage

The sugar shortage in Nepal has seen the sugar in the kitchens go from sweet to scarce, especially since the festivities. The high cost of sugar has made it even more unaffordable for customers who are already struggling with rising inflation. In the meantime, the nation is encountering additional difficulties importing sugar as India, a significant exporter to Nepal, has demanded a higher price. Nepali government officials stated they may approach Pakistan for the sweetener if India’s offer doesn’t prove fair enough.

Reason behind the Shortage

Due to the export prohibition, consumers in Nepal have experienced severe shortages of sugar during the festive seasons. According to Nepali officials, the export that the southern neighbor has allowed might satisfy demand for three to four months.

India has been stopping sugar shipments for the first time in the last seven years, citing lower cane yields due to a lack of rain. After allowing mills to sell a record 11.1 million tons of sugar during the previous season, India only permitted them to export 6.1 million tons until September 30.

Sack of Sugar
Sack of sugar

The Consumption

Nepal needs about 270,000 tons of sugar a year. About 100,000 tons of sweetener are needed annually to make up the shortfall, which is sometimes filled by two government companies and occasionally by private sector imports. The Department of Customs estimates that the value of sugar imports each year is close to Rs. 3 billion.

Challenges Faced

Commodity imports are not always practical because importing nations have the power to raise import tariffs, which would strain our economy. The Indian government offered prices that were 25% higher than the going rates. Even worse, sugar production is falling and prices are rising worldwide, partially because of crop damage caused by El Nino in Asia. 

India, the world’s second-largest producer of sugar, prohibited sugar exports last month in order to preserve enough for its own needs and to help slow the rise in domestic food prices. India’s next sugar harvest is predicted to be less due to the unpredictable monsoon rains this year. A few months ago, the nation made a comparable move regarding rice exports, which had an additional effect on Nepal.

The Possibilities

Nepal is far from being self-sufficient in necessities like sugar because of the indifference of the authorities. The nation imports goods worth Rs 1.61 trillion in the last fiscal year alone, and it spends about Rs3 billion on sugar imports annually, according to reports. Nepalis have frequently suffered as a result of their reliance on other nations and their neighbors. Therefore, the government ought to pay attention to sugarcane farmers and assist them in growing crops rather than pleading with this or that nation for a consistent supply. To address this, the federal government should seek to lower farmers’ market risk and offer enough incentives for sugar production in partnership with local governments. 

Bottom Line

Given that the Food and Agriculture Organization of the United Nations projects a 2 percent decrease in sugar production worldwide, Nepal would be wise to look into ways to boost production at home. If not, the consequences of the sugar shortage will undoubtedly continue to turn the sugar in the kitchen from sweet to scarce before being affordable and easily available again. 

Luzon Technologies

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