Decline in export widens country's trade deficit

KATHMANDU: With the slump in outbound trade of major export items, the country’s overall export performance decreased by eight per cent in terms of value during eight months of the current fiscal 2014-15, compared to the corresponding period of last fiscal.

As per the data maintained by Trade and Export Promotion Centre (TEPC), the country’s total export stood at Rs 56.92 billion, whereas it was Rs 61.84 billion in the first eight months of the previous fiscal.

As a result, the export-import gap widened further this year, with the total import rising by 8.9 folds than total export. The country imported goods worth Rs 504.98 billion in the review period.
TEPC’s data of first eight months, unveiled today, shows that the export of major commodities, namely, iron and steel products, woollen carpets, readymade garments, cardamom, lentils, vegetable fats and oil, tea, textiles, woollen and pashmina shawls decreased heavily.

Vegetable fats and oil lost its market significantly in the review period, plunging by 85.5 percent. The country had exported vegetable fats and oil worth Rs 356.45 million in the first eight months of the previous fiscal, while it accounted for Rs 25.3 million this time around, according to TEPC. Southern neighbour India is the major market for vegetable fat and oil.

Trade of other major export commodities like cardamom dropped by 37 per cent followed by ginger (down 23.9 per cent), woollen and pashmina shawls (down 21.4 per cent), lentils (down 20.4 per cent), copper (down 16.5 per cent) and dentifrices (down 15.9 per cent).

The trade of major commodities, which has large contribution in export income, was down during the review period. Income from trade of iron and steel, the major export products of the country, was down by Rs 611.62 million or 7.3 per cent and its total export income during the review period stood at Rs 7.75 billion.

Moreover, export of woollen carpets and readymade garments also fell by 4.8 per cent and 1.3 per cent, to Rs 4.6 billion and Rs 3.62 billion, respectively, as per TEPC.

Similarly, another major export product — textiles — posted negative export growth of 5.9 per cent and total export income from textiles accounted for Rs 3.54 billion during the review period.

Despite huge fall of 37 per cent in export, cardamom still remained a major export commodity of the country as its total export value was calculated at Rs 2.11 billion.

In the review period, export of some commodities increased. Rosin and resin acid’s export crossed Rs one billion, as its outbound trade rose by around 50 per cent than the previous fiscal. The country exported rosin and resin acid worth Rs 1.11 billion during the review period.

Export of footwear was also encouraging during the first eight months. The country exported footwear worth Rs 1.73 billion, up 10 per cent compared to the corresponding period of the previous fiscal.

Export of handicrafts — the traditional export items of the country — rose by 25.5 per cent in the review period to Rs 480.26 million.

Moreover, export of essential oils increased by 25 per cent to Rs 127.24 million.

The country’s export performance shows that the government may fail to achieve its target of exporting goods worth Rs 100 billion this year as well.

Source: The Himalayan Times