Third country trade deficit crosses Rs 51.6 billion

Kathmandu, August 24:

Due to a sharp rise in imports vis-à-vis exports, Nepal’s trade deficit with the third countries posted a whopping Rs 51.6 billion during the first 11 months of 2006-07.

According to a provisional data released by the Trade and Export Promotion Centre (TEPC), total exports dropped by 6.8 per cent during the period, while the imports registered a growth of 11.3 per cent.

Nepal exported various goods worth over Rs 15.29 billion during the period, whereas the total imports stood at Rs 66.89 billion.

TEPC has cited a number of factors — including plung in exports of readymade garments and woollen carpets, as well as unfavourable security condition, frequent bandhs, lack of investment-friendly environment and power shortages — for a continuous fall of exports.

Of the two major exportable commodities, the export of woollen carpets dropped by 10.8 per cent to Rs 4.76 billion during the period, while the exports of readymade garments witnessed a whopping fall of 26.3 per cent to Rs 3.55 billion.

The major markets for woollen carpets are Germany, the UK, the US and Switzerland, whereas a majority of the garments were exported to the US, France and Canada.

Among the major export commodities that saw negative growth during the period were handicrafts and tanned skin that has dropped by 19 per cent and 11.6 per cent respectively compared to the same period last fiscal year.

Nepal exported Rs 428.8 million worth handicrafts, while the value for tanned skin exports stood at Rs 243.5.

However, some positive trends were noted in exports of silver jewellery, pashmina, tea, pulses and cardamom during the period. The exports of silver jewellery rose by 17.2 per cent to Rs 322.3 million, while the exports of pashmina rose by 13 per cent to Rs 1.68 billion.

Likewise, exports of tea rose by 26 per cent to Rs 116 million and red lentil soared by 111.1 per cent to Rs 384.8 million, while the cardamom exports surged by 22.3 per cent to Rs 111.7 million. During the period, Nepali exports also found new markets like Mauritania, Swaziland, Uganda, Belize and Surinam.

The number of export destination reached to 120 countries with over 140 commodities. The musical instruments, handloom fabrics, synthetic filament yarn and toys were exported from Nepal for the first time during the period.

Among the third country markets, the US consumed 32.4 per cent of total exports followed by Germany with 15.4 per cent.

The UK stood third with 5.7 per cent, France at fourth with 5.4 per cent and Hong Kong at fifth with 4.8 per cent.