May 25: Nepali oil producers who were exporting cooking oil to India are now unable to export due to rising prices of unrefined oil in the international market. Due to the halt in export of refined oil, Nepal's export trade is expected to decline as it is a major contributor to government revenue.
Nikhil Chachan, the operator of Narayani Oil in Birgunj, says that the price is increasing in the international market and the oil stored in the industrial warehouses has been exported.
It takes up to three months to import raw materials from the international market to Nepal and the domestic companies were exporting by using the price difference in the market. According to the entrepreneurs, the stock of raw materials of the domestic industries is finishing as Russia and Ukraine are at war, and Indonesia, the main producer of palm, has banned the exports for nearly a month.
Indonesia has decided to open exports from Monday. Operator of OCB Food Suresh Rungta says that even if the import of raw material is easier, it cannot be exported to India.
"India imports all types of edible oil at 5.5 percent customs duty and 7 percent goods and services tax. In our country, the government collects 10 percent customs duty and 13 percent value added tax," said Rungta, "The transportation cost from Kolkata to Birgunj is Rs 8. In such a situation, it is no longer possible to export refined oil to India by importing raw materials from third countries."
Chachan said that export by taking advantage of price difference is not possible. He told New Business Age that only nominal exports are being made from the old stock now.