Kathmandu, February 15

Ministry of Finance (MoF) today formed a technical committee under coordination of Joint Secretary Shova Kanta Paudel to study if it is necessary to raise customs duty on sugar import and its implications.

The committee will carry out a detailed study on the state of domestic sugar and sugarcane industry and comparative price, production cost and market of these products in the country and recommend MoF for necessary measures to cope with the current situation, informed Shishir Kumar Dhungana, revenue secretary at MoF.

“MoF will take necessary decisions on the basis of the report submitted by the committee.”

Both sugarcane farmers and operators of sugar mills have been appealing the government to raise the import duty on sugar to 50 per cent citing that domestic sugarcane farmers and their produce have been adversely affected by the recent global decline in sugar price and increasing import of cheaper sugar from India. Hence, Ministry of Agricultural Development (MoAD) in the first week of January had recommended MoF to increase the customs duty on sugar imports.

Currently, the government has been levying 15 per cent customs duty on sugar.

Citing that global decline in price of sugar and increasing import of low-cost sugar have been affecting sales of domestically produced sugar, sugar mill owners have been lobbying to raise customs duty on sugar so that domestically produced sugar will get a market. Similarly, sugarcane farmers are also defending the need to raise import duty on sugar in lieu of getting better price of sugarcane and timely release of the payments from sugar factories.

Meanwhile, the Indian government which was already levying 50 per cent import duty on sugar, doubled its import duty to 100 per cent on February 6 to support Indian sugar mills that had been facing difficulty to pay the minimum set price for sugarcane farmers.

However, Indian government’s move to control the price of sugar from dropping further ensures that Indian sugar in the Nepali market is unlikely to drop further, providing some relief to domestic sugar mills.