“The very demand from wholesalers in Kathmandu and other parts of the country has dropped. This has dragged down the overall volume of imports from Tatopani -- the main trading point with China -- in recent months,” said Rajendra Kumar Shrestha, president of the Sindhupalchwok Chamber of Commerce and Industries (SCCI).[break]
Nirmal Hari Adhikari, the chief of the Tatopani customs office, too, said that the import from China has gone down in recent months and the drop has become stark after February, as Yuan appreciated sharply compared to Nepali rupee. “If you look at the customs data, imports have dropped by around 25 percent over the past one month,” he told Republica.
The exchange rate of Nepal Rastra Bank for 1 Yuan that was valued Rs 11 in the beginning of this fiscal year (mid-July) was valued Rs 14 in mid-February. As a result, prices of all import items from China have soared sharply.
“Moreover, the currency (Yuan) has been recording such a significant upheavals everyday that it has become difficult for us to place orders. By the time we make payment, the rates invariably change,” said Shrestha.
He even stated that the prices of goods in Chinese market had gone up by 75 percent when USD was valued Rs 83 per rupee in the Nepali market -- that is about a month ago. “Who would buy the Chinese products when the prices rise by such a huge margin,” Shrestha stated.
As a result, importers based in bordering Sindhupalchowk district said they are receiving less demand from wholesalers and have drastically cut the orders placed to suppliers operating on the other side of the border.
Most of the storage houses in the Khasa market too were found almost empty. “Normally speaking, this should have been a peak season for imports of summer clothes and other relevant goods. But that has not been the case,” Shrestha said.
Customs officials agreed with Shrestha. However, they said the gloom in trade along the northern border was not just due to Yuan appreciation, but also due to almost a month-long public holiday in China to celebrate the Chinese New Year.
“Owing to this, trading through the customs was recorded for just 34 days out of last 60 days,” said Adhikari. As the customs office mobilizes revenue worth around Rs 10 million on each trading day, lack of trade for a day exactly inflicted the same extent of loss.
Given the situation, Tatopani Customs Office collected mere Rs 220 million last month (mid-January to mid-February). Its collections target for the current month (mid-February to mid-March) stands at Rs 270 million, however, we have collected just Rs 90 million as at the end of 25 days of this month, Adhikari said.
“We will mostly miss the target this month as well,” he said. The government has set a target to collect Rs 2.56 billion in revenue over this fiscal year from Tatopani customs.
Related story
Chinese central politburo member Yuan calls on Speaker
