December 5: The export of goods and services has increased by cent percent in the last four months of the current fiscal year compared to the corresponding period of the last fiscal year.
According to the data of the Department of Customs, the export from Nepal in the first month of the current fiscal year has increased by 115.85 percent compared to last year. In the second, third and fourth months, export increased by 115.43 percent, 109.54 percent and 104.29 percent in August, September and October, respectively. Nepal's export has increased by cent percent this year by exporting refined oil after importing crude oil.
In the first four months of the current fiscal year, Nepal has exported goods and services worth Rs 82.12 billion. The share of palm oil, soybean oil and sunflower oil in Nepal’s export alone is 57.8 percent. During this period, Nepal exported refined edible oil (soybean, palm and sunflower) worth Rs. 47.46 billion.
According to the four-month report of the Trade and Export Promotion Center (TEPC), soybean oil accounted for 32.15 per cent of Nepal’s export followed by palm oil (23.16 per cent) and sunflower oil (2.48 per cent).
Krishna Raj Bajagain, a senior official at the TEPC said the rise in the export of palm, soybean and sunflower has led to a cent percent increase in export. He said this volume of export needs to be sustainable and asked the government to hold talks with the Indian government to ensure stability of current exports.
He further added, that the government as well as the private sector and civil society should emphasize on this matter and focus on the implementation of the South Asian Free Trade Organization (SAFTA) as there is a provision of waiver on value added goods.
Last year, India banned import of refined palm oil which had a major impact on Nepal's exports. Due to the ban, palm oil worth Rs 400,000 had only been exported in the review period of the last fiscal year. Meanwhile, palm oil worth Rs 19.2 billion has been exported in the last four months.
Rabi Sainju, former joint secretary at the Ministry of Industry, Commerce and Supplies agrees that growth in export is induced by the export of oil which cannot be considered as sustainable growth. The current volume of export has been possible due to the differences in duty. As soon as India removes tax applied on such exports, Nepal's investment and export both would be at risk.
He argues that it would be appropriate to move to a quota system if oil exports can't be sustained for a long-term. He stressed that Nepal should take it positively if India starts a quota system on oil exports. Nepal can benefit from the quota system to some extent. He said that there is no alternative to increase production to increase the export of Nepali goods. And multinational companies are coming to Indian, Chinese markets which should be targeted for exports.