Print Edition - 2015-07-16 | MONEY
Prices set to drop due to lower import duty
Jul 15, 2015-
Consumers reeling under the weight of skyrocketing prices of daily essentials will breathe a sigh of relief as imported raw pulses, oil seeds, palm oil and raw cereals are set to become cheaper once the new financial ordinance goes into effect from the next fiscal year.
Traders indicated that prices would drop along with the reduced customs duty. The government has halved the import duty on raw seeds of soybean and sunflower besides scrapping the agriculture reform tax in the budget for the next fiscal year.
Similarly, oil factories can import palm oil by paying a 2.5 percent customs duty from the next fiscal year, down from 5 percent. The import duty and agriculture reform tax on raw pulses like mung, rahar, mas and musuro have been slashed by 50 percent.
Prices of pulses have soared in the past nine months. Rahar jumped to Rs195-210 per kg from Rs130-140. Other lentils have increased by Rs25-40 per kg over the period. Traders jacked up prices of soybean oil and sunflower oil by Rs10 per litre last month, citing rising import costs.
The government had raised the agriculture reform tax on imported agro products in last year’s budget. Nepal imports huge quantities of pulses from Canada, Australia, Myanmar and Vietnam as domestic production falls way short of demand. Similarly, Indonesia, Argentina, Ukraine and Malaysia are the major exporters of edible oil to Nepal.
Manish Kumar Agrawal, executive member of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and a large importer of edible oil, said that the financial ordinance would benefit both Nepali industry and consumers by making Nepali agro products more competitive against Indian products.
“When Indian finished products are flooding the market, the government’s decision to slash the customs duty on various raw agro products which will make Nepali products competitive is commendable. This will benefit Nepali industry and consumers,” he said. Agrawal added that they would reduce prices as per the decrease in import costs.
Likewise, Kumud Dugar, managing director of the KL Dugar Group which is one of the major wholesalers of pulses, oil and rice, said that pulses would become cheaper in line with the cut in customs duty.
“We had asked for a 90 percent cut in customs duty, but the government has decreased it by 50 percent. Even then it is laudable which will obviously bring relief to the pulses market,” he said. Dugar added that consumers may not immediately see a drop in the price of edible oil, however.
Traders said that prices of breakfast cereals like oats, corn flakes and porridge made in Nepal would also drop as customs duty on raw cereals has been set at 5 percent.
Published: 16-07-2015 08:07