KATHMANDU: India’s decision to halt sugar exports has triggered ripple effects in Nepal, raising fears of shortage and artificial price hikes in the domestic market.
India imposed a complete ban on exports of both raw and refined sugar from Wednesday, citing the need to stabilize its internal market. Authorities there expect lower sugarcane production this year due to the El Niño weather pattern, prompting the move.
As the world’s second-largest sugar exporter, India’s restriction has immediately impacted Nepal, which relies heavily on imports. The sudden policy shift has created anxiety over possible shortages and rising prices in the Nepali market.
However, Nepal’s government has sought to reassure consumers, claiming there will be no immediate shortage. The Ministry of Industry, Commerce and Supplies says domestic production along with stock held by state agencies such as Salt Trading Corporation and Food Management and Trading Company is sufficient to meet demand for around eight months.
Authorities have urged consumers not to panic-buy or hoard sugar, warning of strict action against traders involved in artificial shortages or black marketing.
Despite this, market concerns are growing. Traders and stakeholders say the India ban has already triggered rumors of scarcity, leading to early price increases and possible cross-border smuggling risks, given the open border between Nepal and India.
Retailers report a noticeable spike in demand over the past few days. Some customers are reportedly buying up to 5 kilograms at a time, fearing future price hikes. Shopkeepers say panic buying is being driven by expectations of shortage rather than actual supply disruption.
Meanwhile, Food Management and Trading Company currently holds around 900 quintals (90 tons) of sugar in stock. The company has also issued an internal tender for 15,000 quintals, with a deadline of May 11. Earlier international tenders proved costly, pushing the company to source sugar domestically.
Officials say imports remain stalled due to the absence of a 1 percent customs duty concession from the Finance Ministry. Without the subsidy, imported sugar would be more expensive than prevailing market rates.
The Nepal Sugar Industry Association insists there is no risk of shortage, claiming domestic stocks are sufficient for the fiscal year and will prevent market disruption.
For now, Nepal sits between official assurances and growing market anxiety, where fear, not supply, is shaping prices.
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