July 25: Nepal’s foreign trade has crossed the mark of Rs 141 billion for the first time in the fiscal year 2020/21.

Soybean oil, which is basically not a native product of Nepal, is considered an important contributor to this growth factor. Entrepreneurs have been importing raw soybean from abroad, packing and exporting them to India.

Soybean oil worth Rs 53.65 billion has been exported during the review period, which is 38 percent of the total export. During this period, raw soybean worth Rs 53.39 billion were imported from foreign countries.

Similarly, soybean oil came up as an alternative to palm after India banned import palm into the country.

Earlier, packaging of palm oil used to be done in 18 industries in Birgunj and Biratnagar, and other industries in Nepalgunj, Butwal and Bhairahawa. However, after the ban imposed on palm oil, traders started packing soybean oil in those industries. As India lifted the ban on palm oil in June, palm oil worth Rs 2.2 billion has been exported this year.

While the processed palm worth Rs 2 billion has been exported, raw palm worth Rs 8 billion has been imported into the country. Traders have been importing raw palm oil and soybean oil from Argentina, Bolivia, Indonesia, Bangladesh, Malaysia and other countries.

Although the import is higher than export, traders have claimed that the export of soybean and palm oil have reduced the country’s trade deficit. Pradip Murarka of Murarka Industries says export of soybean and palm oil have significantly contributed to reducing the trade deficit.

“For the first time, Nepal’s exports have exceeded Rs 100 billion due to the export of soybean oil,” he said, adding, “It will reduce the trade deficit. If the government provides incentives, it will make a significant contribution to the country’s foreign trade.”

On the other hand, economists say that doing business in such a way as to benefit from Indian customs will not contribute to the economy in the long run. Economist Rameshwar Khanal says that the export of vegetable ghee and gold jewelry had earlier reduced the trade deficit, so the current export of palm and soybean oil will be the same. “It cannot be stopped or discouraged, but there is no reason to be happy with the increase in exports and the government to encourage it,” he said.