Nepal’s foreign trade surpassed Rs2 trillion for the second consecutive year, totalling approximately US$14 billion. The remarkable surge was primarily driven by an unprecedented increase in refined edible oil exports. Refined soybean, sunflower, and palm oil exports grew by more than 1,500% over the previous fiscal year. Notably, edible oils currently account for nearly half of Nepal’s total exports, amounting to Rs121.53 billion out of Rs277.03 billion.
The increase is due to a surge in crude oil imports, totalling 958,901 tonnes worth Rs144.79 billion, primarily from Argentina, which has now become Nepal’s third-largest trade partner. The majority of these oils were refined and exported to India, taking advantage of SAFTA’s duty-free trading rights. India remains Nepal’s top trade partner, followed by China and Argentina.
Experts warn that the edible oil trade surge is primarily re-export-based, with no value addition or industrial expansion. The government gained Rs9.29 billion from import duties, but critics believe that the pattern creates long-term economic vulnerabilities, including currency overspending and reliance on re-exports.
Economists have expressed concern about Nepal’s weakening manufacturing sector and lack of a comprehensive trade policy.
