Trade deficit jumps with lentil exports in free-fall


Aug 4, 2016-

Nepal’s trade deficit with Bangladesh has jumped nearly threefold in a span of two years, largely due to a sharp drop in lentil exports.

According to Kakarbhitta Customs, Nepal sent goods worth Rs1.26 billion to Bangladesh in the last fiscal year while shipments in the other direction amounted to Rs3.79 billion. 

In 2014-15, Nepal recorded a trade deficit with Bangladesh for the first time in 10 years. In the previous fiscal year, shipments to Bangladesh were valued at Rs1.15 billion while imports were worth Rs2.53 billion. 

“Trade between the two countries has been rising continuously, but exports have been disappointing,” said Yadav Raj Siwakoti, chief of Nepal Transit and Warehouse Company at Kakarbhitta. “Imports have been ballooning and it’s a matter of worry.” 

Siwakoti said that if the government failed to promote exports of Nepali goods, the trade deficit with Bangladesh could swell alarmingly in the years ahead. 

According to the statistics, Nepal exported lentils worth Rs1.20 billion to Bangladesh. In past years, lentils used to be a key exportable product. Lentil exports to Bangladesh totalled Rs2.71 billion in 2012-13 and dropped to Rs1.96 billion in 2013-14. Lentil exports fell further to Rs1.11 billion in 2014-15. 

Customs statistics show that Nepal imported juice and jute worth Rs2 billion from Bangladesh in the last fiscal year. 

Likewise, imports of pharmaceutical products and solar batteries amounted to Rs97.5 million and Rs52.8 million respectively. Nepal also imported potatoes and cotton worth Rs110 million and Rs75.5 million respectively from Bangladesh.  

Traders said that Nepali products were losing their competitiveness, and as a result, the number of exportable items had been dropping each passing year. Green vegetables, herbs and products manufactured by Dabur Nepal are other exportable items to Bangladesh, but their shipments have not increased, Siwakoti said. 

“Apart from these items, Nepal has not been able to add other products to its list of potential exports.” Traders said that demand for green vegetables and fruits had been increasing in Bangladesh, but Nepal had not been able to fulfill orders.  

For a few years after trade between Nepal and Bangladesh commenced, the neighbouring country enjoyed a trade surplus. In 1996-97, exports from Bangladesh totalled Rs13 million while Nepal shipped goods worth Rs1.1 million.

In 1997-98, Nepal’s exports jumped to Rs42.3 million while imports amounted to Rs48 million. Bangladesh exports more than 20 products, including medicine, solar equipment, raw jute, jam, powder milk and potato to Nepal.

The Kakarbhitta-Phulbari-Banglabandh trade route connecting Nepal and Bangladesh opened in 1997.

Published: 04-08-2016 11:42

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