Foreign trade improves even during the pandemic

Soybean oil lifts the exports

 

Kathmandu, Nov. 7

Nepal’s foreign trade continues to improve even during the COVID-19 pandemic with the export-import ratio dropping down to 1:9.4 in the first three months (mid-July to mid-October) of the current fiscal year 2020/21 from 1:12.3 last year.

Meanwhile, the total size of export has also increased significantly and reached Rs. 31.05 billion which is 14.3 per cent higher than last year’s Rs. 27.2 billion, according to the statistics of the Trade and Export Promotion Centre (TEPC).

Nepal’s foreign trade trajectory had witnessed significant improvement in the first three months of the last fiscal year 2019/20 as well with exports going up to Rs. 27.2 billion from previous year’s Rs. 23.7 billion.

On the contrary, the imports have gone down. Nepal imported goods worth Rs. 292.2 billion in the first three months this year which is down by 12.7 per cent of the last year’s Rs. 334.9 billion. With this, the share of export in foreign trade has gone up to 9.6 per cent from 7.5 per cent last year while import share dropped down to 90.4 per cent this year from 92.5 per cent last year.

In other words, Nepal’s trade deficit has reduced by 15.1 per cent this year.

The export is dominated by agricultural products. According to the statistics of the Department of Customs, agro-based and agro products constitute about 51.3 per cent with the former having 35.1 per cent share. Likewise, exports by the small and medium enterprises comprise 38.6 per cent and others 10.1 per cent.

However, the total export is lifted by a single product – soybean oil. Its export amounted to Rs. 7.6 billion -- about one fourth of the total export -- from last year’s Rs. 1.47 billion. Other major export items are tea, woolen carpet, yarn, jute and its products, readymade garments, cardamom, felt products and juices.

Major goods imported are iron and steel, petroleum products, machinery and parts, vehicles, cereals and electronic equipment.

India, the United States of America, Germany, the United Kingdom and France are Nepal’s major export markets while India, China, Argentina, Canada and Ukraine are the major import sources.

The countries Nepal is facing higher trade deficit in the first three months of the current fiscal year are India, China, Canada, Indonesia, the United Arab Emirates and Malaysia. China’s case is peculiar as it is in second position as the import source and 12^th in terms of export market.

Published in The Rising Nepal daily on 8 November 2020.