Kathmandu, March 13: Sugar millers today said that sugar industry could be instrumental in transforming Nepalese economy and called for Sugar Policy to fully exploit the potential of this industry.
“The nation is in need of Sugar Policy to fully exploit the potential of sugar industry and develop it into a sustainable enterprise against the competitive international sugar market,” Nepal Sugar Mills Association (NSMA)’s President S. K. Agrawal said.
Agrawal however said that the government was not responsive to the private sector’s counsels to exploit these potentials.
Sugar industry witnessed a substantial growth during the last ten years. There was a steady increase in area and productivity of sugarcane during that period. One of the leading cash and industrial crops, currently cane has been farmed in about 54,000 hectares of land by over 100 thousand farmers. The annual production of sugarcane was around 1.8 million metric tonnes during the fiscal year 1998/99. The production per hectare is 36 metric tonnes at present.
The farmers received around 1.14 billion rupees by selling sugarcane during the fiscal year 1998/99. Farm gate price was Rs. 1,200 per metric tonne.
The industry however experienced a threat as sugar price dropped sharply last year in the international market. Duty on sugar being low, various firms opened L/C for the import of more than 90,000 metric tonnes of sugar by the end of November 1999 out of which about 50,000 metric tonnes has already been shipped and is on the way to Nepal.
The government increased the import tax of sugar to 40 per cent early this year to discourage the import of sugar from the third countries. The millers said that it was only a temporary measure and stressed on a comprehensive policy to permanently solve the problem and make Nepal a sugar exporting country.
Agreed the executive members of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI). “The government should co-operate with the private sector to bring out a policy for the development of sugar industry which can play an important role in national development,” FNCCI President Pradeep Kumar Shrestha told a consultative meeting on Sugarcane Development and Need for Sugar Policy here this afternoon. The meeting was organised jointly by NSMA and Agro Enterprise Centre (AEC), a subsidiary of FNCCI.
Deewakar Golchha, FNCCI’s first vice-president, emphasised the need of a sugar institute that would solely be concerned with raising productivity of cane and sugar.
Presenting a paper on the status of sugar industry, AEC Managing Director Dr. D. B. Shakya shed light on the necessity of Sugar Policy.
Agriculture ministry’s Joint Secretary Dr. S. K. Shrestha agreed on the need of Sugar Policy for the development of sugar industry and said that the Ministry would work with the private sector to bring out such a policy.
At present, there are 11 sugar mills in the country. The total crushing capacity of these mills is 2.27 million metric tonnes per year. However, they crushed only about 700 thousand metric tonnes during the fiscal year 1998/99 that amounts to only 30 per cent of the total capacity.
Sugar recovery percentage from cane is around 8.5 per cent in Nepalese sugar mills against the international average of 11 per cent. The average cost of production stands at Rs. 25.33 per kilogram.
The annual national consumption of sugar amounts to 130-140,000 metric tonnes while the total production of sugar was 73,698 metric tonnes in the fiscal year 1998/99.
Shortage of raw materials, high cost of production and management problems have been identified as the main causes behind the low production of sugar.