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A group of 35 students from Sangda and Thalar settlements in Sigas Rural Municipality-7 of Baitadi, gather on the banks of the Nwaghari River every morning. When their teacher, Lakshmi Chand, arrives, the students remove their shoes and slippers, join hands and cross the river together. The scene repeats in the afternoon when they return home from school.

The absence of a bridge over the Nwaghari River has been forcing these students and their teachers to endure this perilous crossing each day. Although the river has already claimed three lives, the students have no choice but to face this dangerous challenge every day.

“All students wait for me on the river banks. We then form a human chain and cautiously make our way across the river. The looming threat of monsoon floods always hangs over us,” Chand shared.

The students echo her sentiments. “We cannot cross the river on our own. That is why we patiently wait for our teacher. Often, our clothes become wet while crossing, leaving us with no option but to continue our studies with wet clothes on,” Bindu Chand, a tenth grader from Sangda, said. He also said that the river has swept away books and study materials belonging to the students many times.

Kalu Singh Saud, the headmaster of Ganesh Secondary School, lamented the lack of a bridge over the Nwaghari River. “This difficult journey has affected the study of these students,” he added.

Local resident Dan Singh Ayer said the local community have approached all three tiers of government with pleas for a bridge. However, despite assurances from politicians during election campaigns, no tangible progress has been made, he added.

Three years ago, a bridge constructed by the rural municipality was swept away by floods. No initiative for  bridge construction has been taken since that incident.  Karna Singh Saud, the chairman of Ward-7, disclosed that the rural municipality has requested the provincial government’s assistance in building a bridge over the Nwaghari River. Chairperson of the rural municipality, Dhana Dhami, said although there were four bridges over the river, there is a need for one more at the location where the students cross the river. “We will now take initiative to build a bridge there as well,” she added.

The rise in the price of sugar has hit the customers hard. Just two weeks ago, sugar was available in the market at Rs 105 per kilogram, but it has now skyrocketed to Rs 140. Moreover, sugar has become scarce in stores, resulting to black marketing. 

The Department of Commerce has sealed the largest sugar warehouse in Kathmandu over alleged black marketing activities. 

The warehouse belonged to Griheshwori Tradelink, and it had been storing sugar under artificial storage with unclear labeling.

Anandraj Pokhrel, information officer at the department, confirmed the warehouse’s closure and said that the sugar was sent for quality testing. 

A complaint was filed with the department, accusing the businessperson, Santosh Khetan, of buying sugar at a low price from industries and selling it at a higher price in Kathmandu without proper invoices. Khetan was allegedly billing the sugar at only Rs 105 per kilogram after selling it at Rs 127 per kilogram wholesale.  

“The report submitted by the Department of Food Technology and Quality Control states that the quality of the sugar has no problem. But as there are no packaging details, we have sent a letter to the producers asking for clarification,” said Pokharel. 

Rajeev Shrestha, a tea shop owner, has not seen such a rise in sugar prices. He said that he had been paying Rs 25 extra for sugar because of the price hike. “Despite the price hike, I have to run the business in order to get by,” he said. 

Sugar ban likely

India is expected to ban sugar mills from exporting from October, making the first halt in export in seven years. The decision is led by a lack of rain that has cut cane yields, according to Reuters. 

India allowed mills to export only 6.1m tons of sugar during the current season to Sept 30, after letting them sell a record 11.1m tons last season. India’s sugar production could fall 3.3 percent to 31.7m tons in the 2023/24 season, as per Reuters. 

In India, sugar prices rose by more than three percent in a fortnight. Monsoon rains in the top cane growing districts of the western state of Maharashtra and the southern state of Karnataka—which together account for more than half of India’s total sugar output—have been as much as 50 percent below average so far this year. Patchy rains would cut sugar output in the 2023/24 season and even reduce planting for the 2024/25 season. 

Trading Economics, an IT service and IT consulting service provider based in New York, reports that insufficient rainfall in India’s key producing states exacerbated poor growing conditions for next season’s crop. The current drought added to concerns that El Nino will extend dryness for a prolonged period, driving cane yields to slump and potentially prompting the Indian government to limit sugar exports for the upcoming season, as it attempts to contain elevated food inflation in the country. 

Rising demand of sugar 

As the Dashain and Tihar festivals are approaching, the demand for sugar has started increasing. The consumption of sugar increases for households and industries ahead of the festival.

Therefore, in view of the upcoming festivals, the Ministry of Industry, Commerce and Supplies has asked the Finance Ministry to waive customs for importing 60,000 tons of sugar to meet the demand. The finance ministry has, however, given permission to import only 20,000 tons for the time being. 

Salt Trading Corporation (STC) and Food Management and Trading Company are set to import 10,000  tons of sugar each for the upcoming festival season. Pokhrel said the procurement process has already started. 

Nepal’s domestic demand for sugar stands at 300,000 tons and it needs to import a huge quantity of sugar mainly from India. There are 12 sugar factories in Nepal that produce around 100,000 tons of sugar. 

The country immediately has 188,000 tons of sugar in stores. The government has slashed the import duty by half to provide relief to consumers. The usual import duty on sugar is 30 percent and there is another 13 percent VAT.

Decline in sugarcane production 

There has been a continuous decline in sugarcane production in the country. As per Statistical Information on Nepalese Agriculture published by the Ministry of Agriculture and Livestock Department, the production of sugar has been constantly declining over the past four years. 

The ministry says production has been falling due to high costs and increasing market risk. Difficulties in getting payment from the mills and chemical fertilizer have discouraged farmers from planting the cash crop. Heat waves, untimely rains and depleting water level have also affected the sugarcane production, leading to disruption in demand and supply curve. 

A host of factors such as weather, supply and demand, health concerns and consumer preferences affects the price of sugar.

Jyoti Baniya, a leading consumer rights activist, said the surge in sugar price has affected businesses and households alike.  “As the festivals are nearing, the rise in sugar price and its shortage will make it difficult for people to purchase this essential item,” 

The Consumer Protection Act 2018 states that every consumer has the right of easy access to goods or services and has the right to choose quality goods or services at the fair competitive price. But the access to sugar consumption is not so. 

If the government fails to inspect and meet the demand and supply of sugar, it is likely that the price will continue to rise. 

The World Bank (WB) has projected an improvement in Nepal's economic growth in the years ahead as the growth is expected to rebound to 3.9 percent in 2024 and 5 percent in the following year.

In the WB's Nepal Development Update report launched today, the rise in the growth is expected due to the impact of lifting import restrictions and the gradual loosening of monetary policy and so on.

However, inflation is expected to remain high, weighing on people’s real disposable incomes and private consumption.

Shedding light on the recent economic developments in Nepal, the WB states that real GDP growth decreased to an estimated 1.9 percent in 2023, the lowest rate since 2020 and substantially below the 10-year average growth rate. Likewise, monetary tightening and the effects of import restrictions contributed to the slowdown. Economic activity was particularly subdued in the industry and services sectors, while agricultural output remained more resilient.

Stating that slow credit growth and import restrictions contributed to a reduction in private investment on the demand side, it said lower capital expenditure and revenue underperformance drove lower public investment. "As a result, total investment decreased by more than 10 percent, a sharper reduction than in 2020. Private consumption remained robust, owing to strong remittance inflows."

It is said that inflation increased for the third successive year in 2023, and the increase was broad-based. Food prices rose due to supply side shocks and domestic policy changes. Non-food prices were pushed by higher housing and utility prices. The persistence of high inflation impedes an effective policy mix to stimulate growth while containing external imbalances.

Domestic policies and India’s trade restriction measures invoked a steep reduction of goods imports.

Remittance inflows increased in 2023, following high outward migration in the previous year.

Exports stagnated below their pre-pandemic level, caused also by a real appreciation due to Nepal’s persistently high inflation. Overall, the current account deficit decreased significantly, and the level of foreign currency reserves increased above its policy floor, according to the WB updates on Nepal development. 

The contraction of imports caused a sharp decline in fiscal revenues, as more than half of total revenues are trade related. Because expenditures contracted at a much slower pace than revenues, the fiscal deficit nearly doubled to 6.1 percent of GDP, the highest deficit recorded in more than two decades. Overall, public debt increased due to the weaker fiscal performance to 41.3 percent of GDP, it is said.

Amid challenges, Nepal is leading the way towards operationalizing its green, resilient, and inclusive development vision to shape the country’s long-term economic recovery.

Improved external competitiveness is key to driving this recovery and enabling Nepal to compete in export markets, in terms of both prices and quality.

This requires emphasis on reforms to help increase domestic productivity and reduce the inflation differential with Nepal’s trading partners, the WB assessed.

An earthquake measuring 5.3 on the Richter scale was recorded on Tuesday.

According to the National Seismological Centre, the tremor struck at 2.42 pm today with its epicenter at Talkot of Bajura.