Kathmandu, January 3

Sugarcane growers and sugar mills have fixed the support price for sugarcane at Rs 448 per quintal this fiscal year as compared to Rs 461 in the previous fiscal. Farmers agreed to sell sugarcane at a lower rate as compared to last year as the price of sugar has been falling globally.

On the other hand the cost of production of the sugar mills has been increasing due to higher transportation cost and scarcity of diesel to run generator sets to operate their factories during load-shedding hours.

Sugar mills also pledged to clear the dues of last fiscal to the farmers by mid-February.

It is reported that sugar mills have to clear due amount worth Rs three billion to the cane growers. There are altogether 11 sugar mills in operation.

Sashikant Agrawal, president of Nepal Sugar Mills Association, has said that mills will clear the dues to farmers within the deadline before the crushing season starts.

In the last fiscal, the government had played the role of a mediator between the cane growers and sugar mills to fix the support price for sugarcane and the price was fixed towards the end of March — at the end of the crushing season. Due to the delay in price fixation, farmers had sent sugarcane at zero value to the mills.

However, this fiscal, cane growers and sugar mill owners fixed the price on their own.

“We were able to fix the price of sugarcane before the starting of the crushing season,” said Kapil Muni Mainali, president of Nepal Sugarcane Producers Federation. “We (farmers) have compromised on the price to some extent due to the difficulties being faced by factories.”

It is said that the factory gate price of sugar this fiscal will stand at around Rs 50 per kg as compared to Rs 54 per kg last fiscal. Factory gate price is the production cost of per kg sugar, in which transportation cost, warehouse cost and taxes are added while determining the market price, according to Agrawal.

Sugarcane, a major cash crop, is being cultivated on 67,000 hectares of land across the country and its annual production stands at 2.96 million tonnes, as per the Ministry of Agricultural Development.

Likewise, sugar worth Rs 14 billion was produced last fiscal. The annual demand for sugar in the country stands at around 213,000 tonnes, which is met through imports mainly from India and Brazil.