Kathmandu, Jan. 8
Nepal's export had crossed the Rs. 100 billion mark
for the first time last year.
In the last Fiscal Year 2020/21, Nepal exported goods
worth Rs. 141.1 billion while the size of export trade was Rs. 97.7 billion in
FY 2019/20.
This celebration of success is massively backed by a new
product that was not in the commercial scene until about a couple years ago -
soyabean oil. Soyabean oil worth Rs. 53.65 billion last year, about a
triple-fold growth from Rs. 18.3 billion in 2019/20.
According to the statistics of the Department of
Customs (DoC), in 2018/19, export of soyabean oil stood at Rs. 2.3 billion.
In the same line of trade growth, soyabean oil took
one-third share in the export business of Nepal this year with Rs. 30.55
billion exports in the first five months (mid-July to mid-December 2021). In
the same period last year, such export amounted to Rs. 13.5 billion.
Export and import of soyabean oil and raw oil
|
Time |
Export
of soyabean oil |
Import
of soyabean raw oil |
||
|
Quantity
(KG) |
Amount
(Rs.) |
Quantity
(Ltr.) |
Amount
(Rs.) |
|
|
Mid-July
to mid-December 2021 |
134,081,853 |
30.55
billion |
985,719,068 |
33.66
billion |
|
Mid-July
to mid-December 2020 |
93,554,326 |
13.5
billion |
143,225,554 |
13.69
billion |
Source: Department of Customs
Soyabean oil has replaced palm oil, the largest export
of last year with Rs. 18.31 billion export value. Palm oil is nowhere in the
export scene this year. Nepal could export palm oil worth only a couple of
million rupees. Its exports were disrupted after India included the product in
its 'restricted list'. The ban was lifted in July last year after about a year.
According to the industrialists, there is 25-30 per
cent value addition to the imported raw materials of soyabean oil. Nepal
produces a small amount of soyabean which is not sufficient for the production
of the oil at industrial scale, so the exports are largely dependent on
imported crude soyabean oil.
Likewise, there are concerns over Indian attitude
towards every Nepali product that records a high export growth. Palm oil is the
recent example of Indian trade highhandedness. Producers of tea, large cardamom,
ginger, coffee and many other items in Nepal have been facing various
non-tariff barriers from India while exporting the goods to India as well as to
third countries.
Exports will continue to grow
Abinahs Bohra, Advisor of the Province 1 committee of
the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and its
executive member, said that the export of soyabean oil will continue to grow in
the years to come.
He also said that there were less chances of Indian
disruption in the bilateral trade of the product. "India has a large
consumer base of edible oil and there is a high demand of soyabean oil. Its
export from Nepal is growing because current Indian production is insufficient
to meet the market demand," said Bohra who runs various food processing
industries.
According to him, since India and Nepal should adhere
to the rules of the South Asian Free Trade Area (SAFTA), Indians can't impose a
ban on soyabean oil until its import there reaches 5 per cent of its total import.
President of Nepal Chamber of Commerce, Rajendra
Malla, said soyabean oil has supported export promotion. However, he said that
creation of markets in third countries would ensure the sustainability of the
product's export. He said that increased export of the product would not do any
harm to the economy.
Earning Indian currency
While Nepal does not have many products to export to
India, soyabean oil is helping to earn Indian currency which is critical in the
country's international trade. Nepal's 60-65 per cent international trade occurs
with India alone. Since the country's Indian currency reserve is insufficient
to finance the imports, Nepal Rastra Bank has to sell foreign currencies like
US Dollars to buy Indian currency.
Bohra said that the income of Indian currency will
cushion the forex reserve and economy. The country will also benefit from the
appreciation of dollar if its reserves could be preserved. Nepal needs about
800 billion Indian rupees to finance imports and pay wages to Indian workers in
Nepal.
Chairman of FNCCI's Export Promotion Committee, Manish
Lal Pradhan, said that in any sense, the country must grab the opportunities
unrolled by the creation of demand and adjustment in the international markets.
"Both the government and private sector want exports to flourish. In
Nepal's Economic Transformation 2030 report, FNCCI has envisioned halving the
trade deficit," he said.
However, private sector lamented that the absence of
accredited lab in Nepal has multiple repercussions for the export business.
They are unable to export the goods like large cardamom and edible oil to the
third countries due to the lack of internationally accredited laboratories.
Top five exports in first five months
|
2020 |
2021 |
|
Soyabean
oil |
Soyabean
oil |
|
Carpet
and floor covering |
Palm
oil |
|
Large
cardamom |
Carpet
and floor covering |
|
Black
tea |
Jute
and textile |
|
Felt |
Sunflower
seed and oil |
Source: Department of Customs
Published in The Rising Nepal daily on 9 January 2022.
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