Nepal imported Rs12.40 billion worth of rice in the first 10 months of the fiscal year recording a rise of 27 percent year-on-year largely due to a fall in paddy output, Nepal Rastra Bank said.
The figures released by the central bank show that the rice import bill stood at Rs9.75 billion during the same period in the last fiscal year. The paddy output dropped 5.1 percent to 4.78 million tonnes this fiscal year.
Nepal produced 258,435 tonnes less paddy compared to last year largely due to a late monsoon and untimely rainfall, resulting in a massive rise in the import bill.
Traders said that consumers were also buying packaged rice imported from India as it costs less than locally packaged rice.
“Most of the factories packaging rice in Nepal are dependent on imported rice as domestic production has not been able to meet demand,” said Chandra Krishna Karmacharya, president of the Rice, Pulses and Oil Manufacturers Association. “One of the major reasons behind the increased imports is the price factor as local rice is relatively more expensive compared to Indian products.”
Trade experts said that the high subsidies given by the Indian government to its farmers had affected local production. “Farmers in India get highly subsidised seeds and fertilizers,” Karmacharya said. “That’s why Indian farmers can sell their products at lower prices, making Nepali products uncompetitive.”
He added that imports would rise further if the government did not accord priority to promoting paddy cultivation in the country.
Meanwhile, traders said that the government should encourage traders to import paddy instead of rice. “If the government raises the tax on rice imports and slashes the tax on paddy imports, local mills will benefit.”
Nishesh Kumar, managing director of Prime Edible that produces Pari rice, said that they had been focusing on various promotional campaigns to compete against imported rice brands that come in packaged format. The company offers awards of gold through a lucky draw on purchase of Pari rice. “Although we are trying to offer good quality rice, consumers are going for Indian rice. So the competition has been tough,” he added.
Similarly, Yuvraj Upadhyay, proprietor of Sungava Kirana Store at Ratopool, said that imported packaged brands account for around 25 percent of his rice sales with Basmati rice being the most popular. “Many consumers prefer Indian rice because of better quality and cheaper price,” he added.