Nepal imported rice worth Rs 2.66 billion from India

- POST REPORT, Kathmandu
Nepal imported rice worth Rs 2.66 billion from India

Oct 29, 2014-

Rice imports from India rose 127.5 percent to Rs 2.66 billion in the first two months of the fiscal year 2014-15. Despite a rise in paddy production in the country, rice imports from the southern neighbour have not come down. In 2013-14, the country imported rice worth Rs 12.37 billion, a rise of 46.4 percent year-on-year, according to the Nepal Rastra Bank.

Paddy production in the country rose 12 percent last fiscal year, while maize production increased 10 percent. When it comes the entire cereal imports, the country imported the products worth Rs28.62 billion last fiscal year, according to the Trade and Export Promotion Centre (TEPC).

Increased dependence on imported products has ballooned the country’s trade deficit to Rs 111.92 billion as of the second month of the fiscal year, according to the NRB. At the end of the last fiscal year, the trade deficit was at Rs 618.46 billion.

Traders and local mill operators attributed the rise in rice imports to comparatively cheaper price of the Indian product. “Paddy production is not increasing in line with the population growth and farmers are turning to cash crops,” said Chandra Krishna Karmacharya, president of the Association of Nepal Rice, Pulses and Oil Industries. “That is why we are becoming dependent on imports.” He added the Nepali rice industry is facing stiff competition from Indian rice as the production cost in India is lower due to government subsidies. Besides, Nepali farmers are facing problems related to irrigation, labour and load-shedding.

Normal Indian Jeera Masino rice is available at Rs 1,400 per 25-kg pack in the domestic market, but the same type of Nepali rice costs Rs1,450-1,500, according to traders. “In India, farmers get subsidy on seeds and fertilisers at larger scales. That’s why Indian farmers can afford to sell their products at cheaper prices, making the Nepali production uncompetitive,” said Karmacharya.

Due to insufficient rain, floods and landslide, domestic paddy production may be hit hard this year, experts say. Sudhir Kumar Roonja, manager of Om Agro Products, said although the government has hiked the import duty on agriculture products to 8 percent from 5 percent, the move is not sufficient.

“The rising import of agriculture products like rice, pulses and oil has been a very serious issue, so the government should further increase the agriculture service tax and encourage commercial farming in the country,” he said, adding the government has to focus on other winter crops like wheat, buckwheat, barley and millet as substitute food products.

Published: 30-10-2014 09:54

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