Summer crop drop may jack up rice import bills

- POST REPORT, Kathmandu
Summer crop drop may jack up rice import bills

Dec 27, 2014-

Drop in summer foodgrains this year is likely to shoot up country’s rice import bills and market prices.

According to the UN’s Food and Agriculture Organization (FAO), Nepal’s cereal imports are expected to rise to a record level of 571,800 tonnes this fiscal, up 10 percent year on year.

The FAO said that most of this volume is rice, imports of which are anticipated at 500 000 tonnes, up 11 percent. The higher import is projected to reduced production of foodgrains and sustained demand. Maize imports in the 2014-15 are forecast to remain similar to the low level of 2013-14.

The Ministry of Agricultural Development has projected paddy output to drop 5.1 percent to 4.78 million tonnes this fiscal. Nepal will produced 258,435 tonnes less paddy compared to last year largely due to a late monsoon and untimely rainfall. The ministry said that expanding urban areas, land plotting for residential development and natural disasters were the other reasons behind the fall in output. More than 61,000 hectares of paddy fields have been left uncultivated, while another 23,900 hectares were damaged by floods and landslides this year.

Contrary to the government estimates, the FAO has projected that Nepal’s paddy output is likely to drop 9 percent to 4.6 million tonnes this fiscal.  The decrease is attributed to an estimated 6 percent contraction in area planted as a result of late and below-average monsoon rains which hindered sowing operations and reduced yields.

Additional damages to the crop were caused by floods and landslides across Mid-western and Far-western regions following heavy rains in August, the FAO said.

The ministry estimates that the country’s maize output, the second staple crop after paddy, is expected to fall 6 percent to 2.14 million tonnes. The figure represented a drop of 137,931 tonnes.

Balloning imports

The Nepal Rastra Bank statistics showed that rice import bills from India jumped 135 percent to Rs 4.70 billion in the first four months of 2014-15.  “As paddy output has been projected to drop, it will definitely exert pressure on the cereal import bills, particularly rice,” said Hem Raj Regmi, under-secretary and a chief statistician at the ministry.  “We have estimated that rice import would hover at 400,000 tonnes this year.”  

According to him, eating habits or rice culture of Nepalis, who prefer consuming rice twice a day, has been putting pressure on the import bills every passing year.

There has been a massive import of Indian Basmati rice since some years, which indicated a growing middle class as well as disposable income due to a result of increased remittance inflow, Regmi said. Studies suggest a big chunk of remittances is used for food consumption, clothing and in luxury goods.

The country imported cereal worth Rs 28.61 billion in the last fiscal, up from Rs 20.92 in the previous fiscal. Of the total cereal import, rice import amounted to Rs 12.37 billion, up from Rs 8.45 billion, the NRB statistics showed.

Published: 28-12-2014 10:30

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