Merchandise exports decline in eight months of FY 2022/23

During the eight months of Fiscal Year 2022/23, merchandise exports decreased 29.1 percent to Rs 104.80 billion against an increase of 82.9 percent in the same period of the previous year.

According to a recent report on the current macroeconomic situation unveiled by Nepal Rastra Bank (NRB), destination-wise, exports to India and China decreased 37.5 percent and 4.9 percent respectively whereas exports to other countries increased 6.0 percent.

Exports of zinc sheet, cardamom, particle board, woollen carpets, tea, among others, increased whereas exports of soybean oil, palm oil, oil cakes, textiles, silverware and jewelry, among others, decreased in the review period.

Imports decrease 19.1 percent

During the eight months of 2022/23, merchandise imports decreased 19.1 percent to Rs.1058.39 billion against an increase of 38.6 percent a year ago. Destination-wise, imports from India, China and other countries decreased 17.6 percent, 21.7 percent, and 21.4 percent respectively.

Imports of petroleum products, chemical fertilizer, sponge iron, gold, other stationeries, among others, increased whereas imports of transport equipment & parts, medicine, M.S. billet, crude soybean oil, telecommunication equipment and parts, among others, decreased in the review period.

Based on customs points, exports from Bhairahawa, Jaleshwor, Kailali, Krishnanagar, Mechi, Nepalgunj, Rasuwa and Tribhuwan Airport Customs Offices increased whereas exports from all the other major customs points decreased in the review period.

On the import side, imports from all the major customs points decreased in the review period.

Trade deficit down 17.9 percent

Total trade deficit decreased 17.9 percent to Rs.953.59 billion during the eight months of 2022/23. Such a deficit had increased 34.5 percent in the corresponding period of the previous year, NRB said.

The export-import ratio decreased to 9.9 percent in the review period from 11.3 percent in the corresponding period of the previous year.

During the eight months of 2022/23, merchandise imports from India by paying convertible foreign currency amounted to Rs 85.12 billion. Such an amount was Rs 147.03 billion in the same period of the previous year.

 Composition of Foreign Trade

As per the Broad Economic Categories (BEC), the intermediate and final consumption goods accounted for 54.5 percent and 45.0 percent of the total exports respectively, whereas the ratio of capital goods in total exports remained negligible at 0.5 percent in the review period.

In the same period of the previous year, the ratio of intermediate, capital and final consumption goods remained 47.3 percent, 0.02 percent and 52.7 percent of total exports respectively.

On the import side, the share of intermediate goods remained 53.3 percent, capital goods 8.5 percent and final consumption goods remained 38.2 percent in the review period. Such ratios were 53.5 percent, 10.7 percent and 35.7 percent respectively in the same period of the previous year.

Export-Import Price Index

The y-o-y unit value export price index, based on customs data, increased 4.1 percent and the import price index increased 6.0 percent in the eighth month of 2022/23. The terms of trade (ToT) index decreased 1.7 percent in the review month compared to a decrease of 2.2 percent a year ago.

Net services income remained at a deficit of Rs 49.08 billion in the review period compared to a deficit of Rs.66.25 billion in the same period of the previous year. Under the service account, travel income increased 98.6 percent to Rs 37.12 billion in the review period which was Rs 18.70 billion in the same period of the previous year.

Under the service account, travel payments increased 50.7 percent to Rs.76.12 billion, including Rs 54.70 billion for education. Such payments were Rs 50.50 billion and Rs 30.38 billion respectively in the same period of the previous year.