International trade shows improvement after two years of decline

KATHMANDU: International trade, which had been on a downward trend for the past two years, has started to show signs of recovery in recent months.

According to the latest trade statistics released by the Customs Department for the fiscal year 2081/82 (until the month of Falgun), most trade indicators have improved compared to last year.

However, trade is still not at the high levels seen two years ago.

As per the department’s data, Nepal has imported goods worth Rs 1.145 trillion during the first eight months of the fiscal year.

This represents an 11.20% increase in imports compared to the same period in 2080 (Falgun).

In terms of value, the imports have risen by Rs 115 billion, highlighting a significant increase in the value of goods imported in just one year.

Key Imports:

• The highest import was diesel, valued at Rs 79 billion.
• Next, Nepal imported crude soybean oil worth Rs 51.35 billion, which was processed domestically and exported to India, significantly contributing to the rise in Nepal’s overall export trade.
• Additionally, Nepal imported Rs 43 billion worth of petrol and Rs 41 billion worth of liquefied petroleum gas (LPG).

Export Growth

On the export front, Nepal has seen significant growth in its export trade. According to the department, Nepal exported goods worth Rs 158 billion until Falgun this fiscal year. This marks a 57.20% increase in exports compared to the same period last year, when exports totaled Rs 100 billion.

A major driver of this export growth is the export of soybean oil. Nepal has exported approximately Rs 48 billion worth of soybean oil during the first eight months, an increase driven by the improved trend of importing soybeans, processing them domestically, and exporting the oil to India.

The high demand for soybean oil in the Indian market and the customs concessions Nepal receives for exporting to India have significantly boosted the exports of this product.

In the past, a similar trend was seen with palm oil. Nepal imported palm oil from Indonesia and Malaysia, processed it in domestic plants, and exported it to India due to the tariff benefits provided by Nepal’s trade agreement with India. This made palm oil one of the highest-exported commodities from Nepal.

Following soybean oil, sunflower oil has also played an important role in the growth of exports, with approximately Rs 8 billion worth of sunflower oil exported.

India remains the primary market for this oil as well. Other notable exports include cardamom worth Rs 6 billion and carpets worth Rs 4.5 billion.

While exports of traditional products like cardamom, carpets, and jute have seen moderate growth, the overall increase in exports has been significant.

Reduced Trade Deficit

The increase in exports has helped slow down the expansion of Nepal’s trade deficit. According to the department, Nepal’s trade deficit for the first eight months of the fiscal year stands at Rs 987 billion, compared to Rs 929 billion in Falgun 2080. The increase in the trade deficit is relatively modest, at just 6.22%.

With the rise in both imports and exports, Nepal’s total international trade has increased by Rs 200 billion.

The total value of international trade for the first eight months of the fiscal year reached Rs 1.33 trillion, compared to Rs 1.13 trillion in the same period last year.

This positive trend in trade indicates a gradual recovery from the challenges faced in the past few years, although the trade sector still has room to return to its previous highs.