Trade deficit falls on lower oil import billNepal’s trade deficit inched down 1.54 percent to Rs544.41 billion in the first 10 months of the current fiscal year, largely due to a steep fall in the oil import bill, the Department of Customs said.
Nepal’s trade deficit inched down 1.54 percent to Rs544.41 billion in the first 10 months of the current fiscal year, largely due to a steep fall in the oil import bill, the Department of Customs said.
Export earnings amounted to Rs54.93 billion, down 22.37 percent, against import expenses of Rs599.34 billion, down 3.9 percent.
During the review period, spending on two key imports—petroleum products and iron and steel—dropped sharply. Nepal’s oil import bill plunged 40 percent to Rs62.85 billion while the iron and steel import bill fell 13.27 percent to Rs53.6 billion.
Nepal’s trade deficit with its largest trading partner India reached Rs340.85 billion. Nepal exported goods worth Rs30.64 billion and imported goods worth Rs371.5 billion to the southern neighbour in the first 10 months of the current fiscal year.
The trade deficit with
China, the second largest
trading partner, totalled Rs91.53 billion. Imports from China amounted to Rs92.93 billion against exports of Rs1.4 billion. Out of the 177 countries with which Nepal conducts trade, it enjoyed a surplus with 38 countries. Petroleum products continue to be Nepal’s top import. According to the report of the Customs Department, the oil import bill came to Rs62.85 billion, down 40 percent.
Officials of Nepal Oil Corporation (NOC) said a freefall in oil prices in the international market was the main reason behind the decline in the country’s oil import bill.
“The import bill was lower even though the volume of imports remain unchanged despite the five-month-long trade embargo because oil became cheaper,” said the NOC source.
After India imposed a trade embargo on September 22, oil shipments from the southern neighbour were down 70 percent till the first week of February. However, NOC claimed it increased imports significantly after the blockade was lifted to ease the crippling shortage in the country.
Meanwhile, cereal imports swelled 9.25 percent to Rs31.06 billion over the review period. According to Customs Department statistics, Nepal imported cereals worth Rs5 billion in the last month.
A drop in the production of winter crops due to a long drought, manpower shortage and irregular supply of inputs has been cited for the increase in cereal imports. Nepal imported cereals valued at Rs35.12 billion in the last fiscal year.
Similarly, the import of precious stones, pharmaceutical products and motor vehicles and spare parts increased significantly. Over the period, the import of precious stones almost doubled to Rs18.55 billion.