Unauthorized sugar imports through the open border with India are creating significant challenges for Nepal's sugar industry during the peak sugarcane crushing season, according to the Nepal Sugar Industries Association.
Organising a press conference in Kathmandu on Tuesday, the association raised concerns about the impact of unauthorized imports on domestic sugar sales.
The association’s President Shashikant Agrawal highlighted that although sugar mills have recently begun crushing sugarcane, the demand for domestic sugar has not met expectations. "Unauthorized imports have reduced market demand for domestically-produced sugar, and if this trend continues, the industry could face a severe crisis," Agrawal warned.
According to the association, Nepal crushed 2,003,875 metric tons of sugarcane last year, producing 178,717 metric tons of sugar. With an annual sugar demand of approximately 250,000 metric tons, Nepal faces a shortfall of about 72,000 metric tons, which is filled through imports from India and other countries.
However, the data of the Department of Customs reveal that only 34,000 metric tons of sugar were officially imported in the last fiscal year. Despite this, there appears to be no shortage of sugar in the market, which the association attributes to unauthorized imports.
Industrialists report that unauthorized sugar inflows have left 13 domestic sugar mills with a stockpile of 5,000 metric tons of sugar from last year. "The ongoing influx of illegal imports threatens to add to the unsold stock this year, putting further pressure on the industry," said Shikhar Shrestha, a member of the association.
Shrestha also warned that this situation could delay payments to sugarcane farmers. "The government must curb illegal imports to ensure farmers receive timely payments and to promote domestic sugar sales," he said.
The Ministry of Agriculture and Livestock Development reports a decline in sugarcane production over recent years. The production dropped from 3.184 million metric tons in FY 2020/21 to 3.13 million metric tons in FY 2022/23.
Farmers attribute this decline to the delay in fixing the support price and payment delays, which have driven many to switch to other crops. "We are shifting to alternative crops due to unreliable pricing and delayed payments," said Harishyam Raya, a sugarcane farmer from Sarlahi.
Despite challenges, the association anticipates sugar production could reach 220,000 metric tons this year, supported by favorable rainfall and improved sugarcane yields. However, industrialists urge the government to enforce stricter measures against unauthorized imports to protect the industry and farmers.
