As per sources, the Nepal rice traders and millers are facing a hard time due to an increase in rice imports from India, especially through land borders. Traders informed that Nepal has been flooded with cheap Indian rice since the government of India has lifted the ban on non-basmati rice exports in September 2011. Further, it has been noted that Indian rice is cheaper by about Rs.50-100 per quintal (around $0.46-$0.92 per ton) compared to domestic rice.
In this context, the rice traders also observed that the local rice output is sufficient to meet 70% of the country’s consumption demand. while remaining 30% can be imported by the government through official shipments. Since, increasing imports are hurting the local rice sector; the traders urged the government to allow for only required imports to fulfill the 30% deficit in the domestic market. Further, the lower agriculture reform charge on rice imports has encouraged more imports. In this regard, it has been demanded that the government hike the agriculture reform charge from the current 8% to 10% to curb imports. It was also urged the government to enhance the existing 5% charge on paddy imports.
It has been reported by the Agriculture Ministry that Nepal imported rice worth Rs.24.75 billion (around $231 million) in the fiscal year 2014-15 (August – July),which is about 43% more from around Rs.17.26 billion (around $161 million) during FY 2013-14. The increase is attributed to poor summer harvests. However, the country’s paddy output has declined by about 258,435 tons or about 5.1% to around 4.78 million tons in this fiscal year due to a late monsoon and untimely rainfall.
In addition, the government also planned to reduce rice import bill by about two-thirds to about Rs.6 billion (around $56 million) in FY 2014-15 which has miserably failed. It is expecting that the imports may increase in FY 2015-16 as droughts in most of the Tarai districts, have affected paddy transplantation. Rice import value is expected to cross Rs.40 billion (around $373 million) next fiscal year. However, the USDA estimates Nepal to import around 400,000 tons of rice in 2015. It estimates Nepal’s MY 2014-15 (October 2014 – September 2015) paddy rice production to decline to about 4.655 million tons (around 3.1 million tons, basis milled) from an estimated 5 million tons (around 3.36 million tons, basis milled) in MY 2013-14.