Low export remains a perennial problem for Nepal

Kathmandu, Dec. 23: Despite a sharp increase in exports, Nepal’s trade deficit continued to widen during the first five months of the current fiscal year 2025/26.

According to trade statistics released by the Department of Customs on Monday, the country’s trade deficit rose by 10.52 per cent to Rs. 649.68 billion by mid-December 2025. 

During the same period of the previous fiscal year 2024/25, the trade deficit stood at Rs. 587.82 billion.

Exports recorded notable growth of 58.17 per cent during the review period. 

Goods worth Rs. 116.50 billion were exported by mid-December, marking an increase of 58.17 per cent from Rs. 73.65 billion in the corresponding period last fiscal year.

However, the pace of export growth has shown signs of slowing. 

Exports had surged by 95 per cent in first month, 88 per cent during first two months, 89 per cent during the first three months and 77.51 per cent during the first four months of the current fiscal year, indicating a gradual decline in momentum in recent months.

The report showed that although exports are rising, their overall volume remains too low to significantly narrow the widening trade deficit.

Both imports and exports increased during the review period, contributing to a rise in overall foreign trade. Total foreign trade increased by 20.07 per cent to reach Rs. 882.69 billion by mid-December.

Imports increased by 15.83 per cent during the review period. 

Goods worth Rs. 766.18 billion were imported in the review period. The country imported goods worth Rs. 661.48 billion in the previous fiscal year 2024/25.

Edible oil exports drive growth

The surge in exports has been largely driven by increased shipments of crude edible oils, particularly soybean oil and sunflower oil. 

However, experts caution that the growth remains heavily dependent on exports of processed oils made from imported crude, rather than domestically produced goods.

Soybean oil exports alone amounted to Rs. 46.55 billion during the review period, while sunflower oil and palm oil exports stood at Rs. 3.73 billion and Rs. 2.82 billion respectively. 

The edible oils accounted for 46 per cent of total exports, with soybean oil alone making up 40 per cent.

The oils are processed domestically from crude oil imported mainly from countries such as Argentina, Ukraine, Brazil, Paraguay, Thailand, United States, and then re-exported to neighbouring markets, particularly India. 

In addition to edible oils, increased exports of garments, carpets, cardamom, yarn and tea and coffee also supported export growth. 

During the first five months of the current fiscal year, Nepal exported tea and coffee worth Rs. 2.06 billion, cardamom worth Rs. 5.5 billion, carpets worth Rs. 4.5 billion, garments worth around Rs. 5 billion, and yarn worth Rs. 5.5 billion.

Meanwhile, imports of crude edible oils remained high among the goods imported during the review period.

The country imported crude soybean oil worth Rs. 46.97 billion, crude palm oil worth Rs. 5 billion, and sunflower oil worth Rs. 7.15 billion during the review period.

Petroleum products also continued to account for a significant share of imports. 

Petroleum imports totalled Rs. 104 billion, including diesel worth Rs. 45.60 billion, petrol worth Rs. 27.33 billion, aviation fuel worth Rs. 8.34 billion, kerosene worth Rs. 289 million, and liquefied petroleum gas worth Rs. 22.39 billion. 

Likewise, the country imported cereals, including maize, paddy and rice and wheat worth Rs. 23 billion during the review period. 

Gold and silver worth Rs. 15 billion have been imported during the review period of the current fiscal year.