Kathmandu, May 19:

Despite tremendous export potential of essential oil, continuous delay in customs points for issuance of certificate of origin (CO) and procedural issues have hit the smooth export, say experts.

Dr Dev Bhakta Shakya, executive director of Agro Enterprises Centre (AEC) said that procedural delays have hit the export of essential oil hard. “The exporters have been facing various hurdles including the ‘market and policy constrains’ to boost the export of herbal products such as essential oil,” said Dr Shakya addressing a programme on ‘techno-legal barriers in export of essential oil from Nepal,’ organised by Nepal Herbs and Herbal Products Association (NEHHPA) here today.

Industry secretary Bharat Bahadur Thapa, on the occasion said that the government is always ready to resolve problems faced by the export sector. “As essential oil’s export potential is high, government will look into the procedural problems in the interest of business sector and enhance export of herbal products,” said Thapa adding that the government is ready to amend policies, if need be.

Shakya stressed on the need of commercialisation of herbal sector to earn more money. “Recently, a study has also been done to develop the wholesale market as entrepreneurs have shown keen interest to invest in this sector,” he said. Shakya also said that there is a need to identify the products that have more potential to encourage foreign direct investment (FDI) and local investment in the sector.

Bhaweshwar Das, technical consultant informed that essential oil is being exported to Belgium, France, Germany, Singapore and the US. The processing units for essential oil production are in Humla, Banke, Palpa, Parasi, Tanahu, Bara, Lalitpur, Kathmandu, Sarlahi, Sunsari, Dhankuta and Jhapa.

He said, “There is enough human resources in this sector and it can be advanced, if proper marketing and policy issues are addressed in time.” He said that there is a total of 2000 botanists, 1000 chemists and 500 pharmacists, which is a sufficient manpower to strengthen herbal industry.

Pradeep Maharjan, marketing team leader of Business Development Services, informed that Nepal’s share of essential oil in the global trade stands only at 0.017 per cent.

The total global transactions stands at $300 million annually. “The growth rate of essential oil production registers at around 14 per cent,” says Maharjan. However, total export value of herbal products goes over Rs 120 million.

A total of 10 kinds of essential oil is produced in Nepal from major eight industries. “There are more than 50 small industries that produces essential oil,” Maharjan informed, “Certification of goods has been a biggest problem, specially at the customs points. The government has to immediately start simplifying procedures to encourage export of herbal products and make the sector more lucrative.”

Kiran Raj Pandey, director at the AEC under the project ‘Improving the Policy Environment for Agricultural Trade, production and Marketing in Nepal’ sought paradigm shift in policy to make the sector more profitable. Of the total production of 30 tonnes of essential oil, eight tonnes is consumed locally and the rest is exported to third countries.

Basically, essential oil is used in making chocolate, soap, perfumes, shampoo and ice-cream, according to the experts.

Last year alone, about 13 tonnes of essential oil was exported to different countries amount to about Rs 20 million. About 50,000 people – directly and indirectly – are involved in the sector, according to NEHHPA.