August 9: The production of palm oil, one of the major export products of Nepal, has declined by almost 80 percent after India re-imposed a ban on import of palm oil from Nepal.

India’s Directorate General of Foreign Trade (DGFT) had imposed a ban of import of palm oil on second week of January. One month later, India allowed its businessmen to import palm oil by issuing license. The government of Nepal then imposed lockdown on March 24 to contain the spread of coronavirus. During the lockdown period, DGFT decided to scrap the license provided to the importers to bring refined palm oil from Nepal. Such decision was taken on the second week of May.

Despite having adequate raw materials, Nepali businessmen reduced the production of palm oil taking into consideration the lack of market for their refined product.

There are altogether 18 industries in Birgunj and Biratnagar for refining palm oil. Those industries currently have a stock of more than 100,000 metric tons of raw materials for producing palm oil. Nepal’s internal demand for palm oil is only 15 to 20 percent of production. All the rest is sold in India.

However, industrialist Pradeep Muraraka says they have lowered the production due to lack of market.

“We have ample of stock of refined palm oil but there is no market. Although the industry has reopened, we don’t have much work,” says Muraraka.

According to him, palm oil industry has given employment to more than 3000 workers. But the industrialists have not been able to pay the workers because the production has stopped.

“We are now in a situation to lay off the staff because we cannot afford to pay them because the industry is closed and we are unable to generate income,” he added.