Imports down by 18%, exports one-third

Kathmandu, Nov. 23

The imports have fallen by 18 per cent or so in the first four months of the current Fiscal Year 2022/23 against the rise of 61.5 per cent during the same period in the last fiscal 2021/22.

According to the statistics of the Department of Customs (DoC), Nepal imported goods worth Rs. 532.7 billion from mid-July to mid-November this year while the imports last year amounted to Rs. 650.3 billion. Compared to the Rs. 402.5 billion of FY 2020/21, last year's imports increased by more than 61 per cent. Although the export was also increased by 104.3 per cent last year, given the small scale of exports, it couldn't make much difference.

Meanwhile, the exports also slumped this year by approximately one-third compared to the size of the last year's trade bringing it down to Rs. 54.7 billion from Rs. 82.1 billion. Soyabean oil is the single largest product that caused the exports to record negative growth as its imports dwindled from Rs. 26.4 billion last year's four months to just Rs. 5.3 billion this year. Likewise, the exports of palm oil products have also gone down by about Rs. 10 billion.

Soyabean oil and palm oil are the products wholly based on the imported raw materials and exported to India with minimum value addition to reap benefits from the customs arbitrage.

Raw palm oil is imported from Indonesia, India, Malaysia, Philippines and Thailand while raw soyabean oil comes from Argentina, United Arab Emirates, United States of America and Bangladesh.

Nepal's priority produces like tea and large cardamom also witnessed decline in their exports while trade of felt products saw slight increase this year.

However, in the first four months of the current fiscal year, although Nepal's trade deficit decreased by 15.88 per cent, its imports/exports ratio went up to 9.73 from 7.92 of last year. Similarly, exports share to total trade slumped by about 17 per cent which had increased by 23.5 per cent last year, but imports share increased by 2.13 per cent. It means Nepal imports goods worth Rs. 90.68 per cent and exports goods of Rs. 9.32.

In the wake of the increased imports and trade deficit and depleting foreign currency reserves last year, the government and the Nepal Rastra Bank had adopted control measures in imports with a provision of maintaining cash margin on the letter of credit for various products, and ban on various luxury products including vehicles and liquors. Some of the bans still are in implementation.

Nepal's major exports in the first four months this year are soyabean oil, palm oil, carpets and textiles, woven fabrics, sunflower-seed and oil, felt products, large cardamom, yarn, tea and juice.

Likewise, major imports are petroleum products, motorcycles, crude soyabean oil, steel, smartphones, iron, ceramics goods, vehicles, coal, gold and crude palm oil. Diesel, petrol and liquified petrolium gas (LPG) worth about Rs. 386 billion was imported in the review period. 

Published in The Rising Nepal daily on 24 November 2022.