KATHMANDU, Jan 26: Nepal exported palm oil worth Rs 1.13 billion while it imported crude palm oil of Rs 3.41 billion in the first six months of the current fiscal year.
According to the Department of Customs, the country exported more than 6.52 million liters of palm oil to India during the review period. On the other hand, the import of raw palm oil was recorded at over 23.42 million liters, out of which the government collected customs revenue of Rs 947.25 million.
Until FY 2017/18, Nepal did not export any palm oil, as the country doesn’t produce even a drop of palm oil. However, the product’s export surged abruptly to over Rs 8.7 billion in the following FY.
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Taking advantage of a clause in the South Asian Free Trade Area (SAFTA), Nepali traders started to export edible oils including palm oil to India. As the SAFTA agreement provisions zero tariffs on goods exported from underdeveloped countries, Nepali traders had been importing crude palm oil from other countries paying minimum tariffs and then exporting the finished product to India with zero tariffs. India provides this facility to the Nepali products that have at least 30 percent value addition inside the country.
Export of palm oil peaked in FY 2021/22, with Nepal exporting the product worth Rs 41.6 billion to India. However, its exports in 2022/23 were limited to Rs 20.51 billion, a sharp drop of 50.1 percent from the previous fiscal year's figure.
Nepal's palm oil export to India was affected adversely after the southern neighbour slashed customs duty on crude palm oil from 7.5 to 5 percent to lower edible oil prices ahead of its state elections in February 2022.
According to traders, the exports of edible oils started to increase again after India hiked the tariff on the raw materials imported from third countries. Nepal imports crude palm oil from Malaysia, Thailand and Indonesia.
Nepal made a good deal of export earnings out of the edible oils including palm oil, soybean oil and sunflower oil to India for around four years until FY 2021/22, when the exported amount was Rs 93.69 billion. However, the figure dropped to Rs 29.42 billion in 2022/23, while it had been in declining trend thereafter.
During mid-July 2024 and mid-January 2025, Nepal’s exports surged 31.78 percent to Rs 98.78 billion, mainly due to increased exports of the edible oils.
