Frequent shutdowns, perennial load-shedding, growing dominance of different brands of mustard oil imported from India as well as the government’s decision to impose VAT on mustard oil, have forced more than half of the local oil mills to close their operations.
According to Nepal Oil, Pulse and Mustard Producers Association Morang chapter, 17 mills out of 32 have closed so far and the remaining are also facing uncertainty.
Local oil mills suffered the most after the government announced a 13 percent VAT on food items including mustard oil few years ago.
“The oil mills are seeing their worst times as they are unable to compete with Indian oil brands, “said Ganga Bisan Rathi, vice-president of the association.
Nepal needs 30,000 ton of mustard seeds per year and it has been importing 20,000 ton from India, Ukraine, Australia and Canada to fill the supply deficit.
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