KATHMANDU, May 14: Price of sugar started to increase in the domestic market after India announced a ban on its sugar export, which is also likely to take a toll on prices of related products including sweets and packed biscuits and confectionaries.
Publishing the decision in the government’s gazette on Wednesday, the Indian authorities have decided to impose a ban on sugar till September 30 or another public notice of the Indian government. The neighboring country has promptly got into action citing the possible decline in its production in the upcoming production season.
“The export policy of Sugar (Raw Sugar, White Sugar and Refined Sugar)... is amended from ‘Restricted’ to ‘Prohibited’ with immediate effect till September 30, 2026, or until further orders, whichever is earlier,” the Directorate General of Foreign Trade (DGFT) said in a notification dated May 13.
India is one of the largest sugar producers globally. With India's announcement, the price of sugar has increased by 2-3 percent in the global market, according to international media. The export ban however will not be applicable to the deals signed earlier and countries of European Union and the USA, reads the public notice of the Indian government.
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India has been undergoing the pressure of inflation and shortfall in its foreign currency reserves due to soaring petroleum prices of late. The Indian government is struggling to control food inflation, Indian media report.
Banning exports of a commodity helps in preventing a rise in prices, amid inflation concerns and uncertainty caused by the West Asia conflict. In October 2022, India imposed export restriction on sugar, while it was extended later on from time to time.
With the recent move of the Indian government, Nepali sugar producers are reported to have increased the price of their product by Rs 2 per kg to sell at the local market. Earlier, sugar producers had been demanding the government to increase customs duty to 30 percent from 15 percent, complaining that they had been unable to compete with low priced Indian sweetener.
As per the government records, Nepal’s sugar production has declined to Rs 120,000 tons from 155,000 tons annually, due to a massive fall in production of its raw material sugarcane. The yearly demand is 270,000 tons as the per capita consumption stands at 4-6 kgs.
Netra Prasad Subedi, spokesperson of the Ministry of Industry, Commerce and Supplies, said the sugar supply in Nepal’s market will be largely affected by India’s decision. “The government will hold talks with Indian authorities requesting them to ease supply for Nepal,” said Subedi.
Retailers said the sugar crisis could be severe in the upcoming festival season as India has set the deadline to lift the ban just before this year’s Dashain and Tihar. According to them, blackmarket and price hikes could be rampant due to shortage.
Along with sugar price, packed food items like biscuits, confectionery, soft drinks, tetrapacks, bakery products and sweets are likely to be dearer in the domestic market.
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