May 22: India's ban on wheat exports last week is going to affect the production of six flour mills and dozens of other wheat-based industries in Nepal. The industrialists said that the problem will emerge in three months even though there is no problem at the moment as the local wheat produce hit the market just recently. They suggested that the government should import wheat from India through G2G agreement since the local production is not going to last long.
The industrialists expressed that the government should initiate discussions with the Indian government immediately to tackle the imminent crisis after three months. They also said that there is no other alternative than to shut down the industries as Nepal's production cannot sustain the industries if the import of wheat from India is also halted.
Bikash Begwani, vice-president of the Morang Merchants’ Association and operator of Bishal Maida Mill said that he has enough stock of wheat for one month. He said that even though the wheat produced in the country can sustain the industry for a few months, wheat from India is necessary to run the industry for the rest of the year.
Begwani suggested that the government should negotiate with the Indian government and import wheat to Nepal as soon as possible. He added that the ban imposed by India on wheat export will cause a big impact on the flour mills and other industries including noodles and biscuits industries that rely heavily on wheat.
Begwani said that operating industries by importing flour from India will make the products 25 to 35 percent more expensive. “Consumers will be able to get the products at a lower price if wheat itself is imported through G2G process to operate the industries,” he said.
According to the Department of Customs, Nepal imported about 336,000 metric tons of wheat worth Rs 6.90 billion from India last year. Ram Chandra Dhungana, information officer at the Biratnagar Customs Office, said that 6,800 metric tons of wheat worth Rs 2.20 billion was imported via Biratnagar last year. According to him, wheat has not been imported from Biratnagar after India announced the ban.
Harivansh Rathi, the operator of Gaumati Foods says that the Nepali industries are dependent on imported wheat from India for nine months while the local produce sustain the industries for three months. He said that if the government of Nepal fails to facilitate the import of wheat by discussing with the government of India, a huge shortage will be created. Recalling the time when India imposed a ban on wheat exports a few years ago, Rathi said, “India provided wheat to Nepal and other neighboring countries by implementing a quota system. Therefore, it is necessary to hold discussions with the Indian government immediately to prevent the shortage.”
India is the world's second largest wheat producer after China. Wheat supply through the Black Sea is now halted due to tensions between Russia, the third largest producer of wheat, and Ukraine, the eighth largest producer. This time, India imposed a ban on exports, citing the decline of wheat production in India due to the scorching heat of March as well as the Russia-Ukraine war. However, Rathi said that Nepal's industries are confident of India adopting some lenient policies for neighboring countries. On the other hand, India itself has stated that exports to countries that need wheat for food security will not be halted.
Operator of Baba Flour Mill Suresh Rathi said that even if India bans wheat export, local production will last for a few months and there will be no immediate problem. He says the ban will impact in the long run. He said that the industry can be run by wheat imported from other countries after paying customs duty and taking advantage of the open border Nepal shares with India.