Cigarettes in short supply in Nepal as traders hoard tobacco products in anticipation that prices will rise following government's budget speech

Nevin Barich

KATHMANDU, Nepal , July 9, 2014 (My Republica) – Cigarette is in short supply in the market as traders hoard tobacco products in anticipation that the price will go up after the budget speech.

Retailers say as the government generally raises tax on tobacco products through the budget speech, wholesalers are hoarding cigarettes to make a quick buck.

The government is preparing to unveil budget for the new fiscal year by mid-July.

"We have not been able to sell cigarette as per the demand as we are not getting adequate supply from wholesalers," Kishor Lama, a Chabahil-based retailer, said. "As cigarette price is expected to go up after the budget speech, wholesalers are hoarding tobacco products."

Lama said he has been selling smokers only a few sticks of cigarettes as he does not have sufficient quantity in stock.

Wholesalers, however, refute the allegations. "Distributors and manufacturers themselves have reduced supply. There is nothing we can do," Raju Shrestha, a Maitidevi-based wholesaler, said.

Interestingly, manufacturers blame wholesalers and retailers for the shortage. Saying that his company has increased supply by 15 percent since one month, Ravi KC, vice president of Surya Nepal, said some big wholesalers and retailers were hoarding cigarettes despite receiving increased supply from the manufacturer. "Shortage of tobacco products before budget speech has become a usual phenomenon for the past few years as traders know prices of tobacco products will increase after the budget speech," KC said.

According to KC, Surya Nepal enjoys 85 percent share in the country's cigarette market. The company has been producing cigarette in different brands like Surya, Surya Lights, Shikhar, Khukuri and Pilot among others.

Whatever the reasons be, artificial shortage of cigarette has affected smokers. "Shopkeepers are giving us only a few sticks that too by charging higher price," Sumit Baral of Sundhara said. "They are charging as much as Rs 10 per stick of cigarette which costs only Rs 8 per stick."

Meanwhile, government officials have vowed to increasing monitoring activities to control anomalies in the market. "Not only the tobacco products, we have been receiving complaints that traders are arbitrarily raising prices of other products as well," Hari Narayan Belbase, director of Department of Commerce and Supply Management (DoCSM), said, adding, "We will take appropriate action against the wrong-doers." Published by HT Syndication with permission from Republica. For any query with respect to this article or any other content requirement, please contact Editor at htsyndication@hindustantimes.com

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