Exports cover only 45 per cent of fuel imports

Goods export continues to slump

 

Kathmandu, Apr. 19

Nepal's goods export continues to slump this year despite a significant contraction in the overall trade deficit.

By the end of the third quarter of the current Fiscal Year 2022/23, Nepal’s export to total trade has come down to 8.96 per cent from 9.87 per cent of the same period last year. According to the statistics released by the Department of Customs on Wednesday, Nepal exported goods worth Rs. 118.27 billion in the first nine months of this year which is down by 26.34 per cent of the FY 2021/22 when the country exported the merchandise worth Rs. 160.57 billion.

Meanwhile, the country imported petroleum fuel including diesel, petrol and liquified petroleum gas worth Rs. 261.09 billion. This is about 55 per cent higher than the total exports of the country in the same period.

This is a massive export loss compared with the growth Nepal witnessed last year. By the end of the third quarter of 2021/22 (mid-April), Nepal exported goods worth Rs. 160.57 billion, which was up by about 70 per cent compared to FY 2020/21, when the country could sell goods of only Rs. 94.76 billion to other countries.

That year, the growth in export was more than 20 per cent as the total size climbed to Rs. 95.76 billion by the end of nine months of the fiscal year from Rs. 78.81 billion in 2019/20.

 

Imports down by 18 pc

Meanwhile, in the nine months of the current FY 2022/23, Nepal has imported goods worth Rs. 1201.5 billion which is about 18.08 per cent lower than last year's import of Rs. 1466.66 billion during the same period. The imports had gone up by about 32 per cent last year, from Rs. 1111.39 billion of 2020/21.

Ban on the imports of the luxury goods like vehicles and liquor and provision for the need to maintain cash margin for the Letter of Credit to import several other items had discouraged the imports significantly.

Likewise, the shortage of liquidity in the country's financial system even before the beginning of this fiscal year and skyrocketing price of imported goods in the domestic market due to the Russia's invasion on Ukraine and disturbance created by the COVID-19 pandemic in the global supply chain scared the consumers away from the market. As a result, overall imports went down, experts said.

 

Oils: Rs. 71 bn import, Rs. 26 bn export

According to the DoC's statistics, Nepal's major exports are animal or vegetable fats and oils, coffee and tea, carpets and textiles, fibres, iron and steel and apparel. The country exported fats and oils of Rs. 26 billion in the past nine months. Likewise, it exported tea and coffee worth Rs. 10 billion, carpets and textiles Rs. 9 billion, fibres Rs. 8.8 billion, and iron and steel goods of Rs. 7.3 billion.

But astonishingly, the country has imported the fats and oils – including palm and soybean oils – worth Rs. 71.3 billion in the same period. This means the overall national earning from the export of this item is not significant.

Iron and steel goods are the new entrants to this year's top export list.

Likewise, major imports are petroleum fuel, iron and steel, mechanical appliances, animal or vegetable fats, plastic items and cereals. Nepal imported iron and steel worth Rs. 100.7 billion, mechanical appliances of Rs. 75 billion, electrical machinery of Rs. 73 billion and plastic items Rs. 45.6 billion.

 

Top trading partners

Nepal's top trading partners for exports are India, the United States of America, Germany, the United Kingdom, Turkey, Canada, France, Australia, Japan and Italy. The country exported goods worth Rs. 82 billion to India in the past nine months. Similarly, it exported goods worth Rs. 13 billion to the USA, Rs. 3 billion to Germany and R. 2.5 billion to the UK.

Although China is the second largest source of imports with Rs. 162.4 billion, it is not in the top 10 export markets of Nepal. The latter could export the goods of only Rs. 636 million to the former.  

Nepal imported goods of Rs. 753.7 billion from India. Other major source countries are the Indonesia, the United Arab Emirates, Argentina, Malaysia, Australia, Ukraine and the USA.

Published in The Rising Nepal daily on 20 April 2023.