Export revenues from Nepal Trade Integrated Strategy-listed products contracted by 4 percent year-on-year in the first six months of the fiscal year, which trade experts attributed to lack of support in production and valuation and market diversification.

Purushottam Ojha, former secretary of the Ministry of Industry, Commerce and Supply, said that shipments had been going down for failure to improve the quality and quantity of the products and link them with the international market.

“Most of the export goods go to India, and the time has come to diversify to other international markets by enhancing the quality of production,” he said.

“For example, Nepal exports ginger in its raw form, but if traders could export the spice only after processing it to some extent and branding it, they could enlarge their market to other places besides India."

There is strong competition in the international market, so the country needs to create a strategy according to international demand, he added.

According to a report issued by the Trade and Export Promotion Centre, shipments of listed products during the period mid-July to mid-January were worth Rs18.09 billion, compared to Rs18.87 billion in the same period of the previous year.

Bacchu Poudel, president of the Nepal Trans-Himalayan Border Commerce Association, said that exports could drop as a fallout of the coronavirus outbreak. Most of the raw materials used to manufacture export goods come from China, and deliveries from the northern neighbour have practically stopped, he said.

Exports of tea, ginger, medicinal and aromatic plants, leather, fabric, textile, yarn and rope, carpets and footwear declined during the first half of the fiscal year. Cardamom and pashmina were the only two products that saw an export growth.

Cardamom shipments jumped by 64 percent to Rs2.5 billion. In the first half of the last fiscal year, exports were valued at Rs1.5 billion.

Nirmal Bhattarai, immediate past president of the Large Cardamom Entrepreneurs Association of Nepal, said that shipments surged due to a sharp growth in stocks available for export from increased cardamom acreage this year.

The farm gate price of cardamom has remained in the range of Rs600-800 for the past two years, which was an encouragement for growers, he said.

Cardamom farming has spread to the far western part of the country while it used to be grown only in the eastern region in the past. The spice is now grown on 15,000 hectares across the country, he said.

Bhattarai said that the country exported 5,000 tonnes of large cardamom in the last fiscal year and predicted that shipments could swell to 5,500 tonnes this year. India is the largest buyer of Nepali cardamom followed by Dubai, Qatar and European countries, said Bhattarai.

Exports of pashmina increased by 6.8 percent to Rs1.53 billion in the first six months of the current fiscal year from Rs1.43 billion in the same period last year. Shipments had been on a constant decline during the past few years which traders blamed on lack of branding and promotional activities in the international market.

Pushpa Man Shrestha, immediate past president of the Nepal Pashmina Industries Association, said that production had been hit in recent days as the supply of raw materials from China had stopped due to the epidemic there. Nepal imports almost all raw materials needed to make pashmina from China.

Tea exports saw a steep year-on-year drop of 24 percent to Rs1.65 billion. Shipments in the first half of the previous year totalled Rs2.19 billion.

Gaurab Luitel, information officer at the National Tea and Coffee Development Board, said that the production of the first batch this year was disrupted due to labour unrest, leading to exports falling sharply. Lack of organic certification is also one of the major reasons for the drop, he added.

Exports of fabric, textile, yarn and rope also declined by 10 percent to Rs7 billion from Rs7.8 billion in the previous year.

Carpet shipments fell 3 percent to Rs3.6 billion from Rs3.7 billion while ginger exports decreased by 11 percent to Rs285 million from Rs322 million last year.

The export of footwear decreased by 15 percent to Rs568 million from Rs672 million.

Krishna Kumar Phuyal, president of the Footwear Manufacturers Association of Nepal, attributed the drop in exports to manufacturers focusing on the domestic market.

“We are working to fulfil the requirement of the domestic market first in a bid to promote import substitution,” he said. India is a major market for Nepali footwear, and the increase in customs duty by the southern neighbour could hurt exports.

Nepal produces 50-60 million pairs of shoes annually compared to the requirement of 80-100 million pairs.

Exports of medicinal and aromatic plants declined by 12.7 percent to Rs718 million during the review period from Rs823 million previously. Leather exports plunged by 53 percent to Rs116 million from Rs247 million in the first half of the last fiscal year.