Status of agricultural import and export during 2016/17 in Nepal. Reasons of trade deficit

1. STATUS OF AGRICULTURAL
IMPORT AND EXPORT OF NEPAL
PRESENTED BY:
SURESH SIMKHADA (ABM-06M-2016)
M.SC. AG 3rd SEMESTER
DEPARTMENT OF AGRI-ECONOMICS AND AGRIBUSINESS MANAGEMENT
AGRICULTURE AND FORESTRY UNIVERSITY, RAMPUR

2. INTRODUCTION
• The state of Nepal’s global trade is not considered healthy. There are large gaps
between imports and exports and their growth rates, leading to escalating trade deficits.
• Nepal has a high conglomeration of export items - only 10 export items account for 66.1
per cent of the total exports.
• Almost three-quarters (72.3%) of Nepalese exports were delivered to Asian countries
while 14.2% were sold to European countries and another 12.3% worth of goods to
North America (Workman, 2018).
• In the total trade of Nepal, 61.8 per cent is with India, and there is surging trade
imbalances. Nepal had increasing trade deficit of 83.4 %, among which trade deficit
with India alone is 63% (MoF, 2017).

3. • During the fiscal year 2016/17 Nepal’s total export value was NRs 731.3 billion
and imported goods of worth NRs 9860 billion (TEPC, 2017).
• Nepal export different agricultural products like cardamom, tea, coffee, ginger,
lentil, vegetables and import large amount of food grain, edible oils, spices,
animal feeds and different animal products from other countries.
S.N Commodities Value in (NRs. billion) % Share in total export
1 Lentil 10.32 1.4
2 Cardamom 38.76 5.3
3 Tea 25.1 3.4
4 Ginger 2.44 0.3
5 Juices 50.95 7
6 Meat and edible meat offal 3.62 0.5
Source: TEPC, 2017
Table 1: Major agricultural export of Nepal and their share in total export 2016/17

4. • Nepal’s agricultural goods import bill crossed NRs200 billion for the first time in the fiscal year
2016/17, propelling an already bloated trade deficit to its highest level on record.
• According to the Department of Customs, Nepal imported farm products worth Rs 215.50 billion,
up 10 percent year-on-year. The share of agro products in the total import bill has swelled to 17
percent.
S.N Commodities Value (NRs. billion)
1 Cereals 44.52
2 Vegetable fat and oils 29.72
3 Vegetables 22.67
4 Fruits and Nuts 14.52
5 Tea, Coffee and Spices 10.74
6 Animal feeds 15.51
7 Animals 4.13
Source: Department of customs
Table 2: Major agricultural imports of Nepal 2016/17

6. Share of different agro products in trade
Source: Januka Pandit, MoAD

7. Source: Januka Pandit, MoAD

8. • A growth in the food processing industry and expansion of livestock
industry has also increased the import of agro product.
• Cereal tops the list of agro imports followed by edible oil, vegetables
and food and animal fodder. As per the figures, the cereal import bill
amounted to Rs44.52 billion in the last fiscal year, up from Rs40.14
billion in the previous year.
• This is mainly because the expanding population of middle-income.
Nepalese prefers to eat basmati rice, and Nepal doesn’t grow such
fine rice in sufficient quantities.

9. CONCLUSION
• Though Nepal export different agro products, its import is much higher than export and facing
huge agricultural trade deficit which is surging day by day.
• The reason behind large agricultural import is increasing population growth, less productivity of
Nepal and changing life style of middle class Nepalese people.
• Export from Nepal is low because of many trade barrier like:
1. Small size of Nepalese producers and traders (low investment)
2. Lack of consistency in quality
3. Infrastructure barrier
4. Trade policy and agreements
5. Tariffs barrier etc.
• We need to change our consumption habit and increase investment for increasing production.