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Shift in export trend mirrors new advantages
KATHMANDU, JUN 27 -
Major shifts have taken place in the last decade in the country’s export sector. The Nepal Trade Integration Strategy (NTIS) 2010 reveals how new products have emerged as major export items gradually displacing conventional exports.
The NTIS shows iron and steel products, plastic goods, coffee, tea, spices and vegetables have emerged as rising stars of Nepal’s export trade with remarkable export growth from 2004-08. According to the NTIS, the growth in the export of iron and steel products, tea, instant noodles, ginger, plastic articles, coffee, tea and spice has been much higher than traditional products such as garments, carpets and pashmina.
The export of iron and steel surged by 52.6 percent in 2004-08. Duty-free access to the Indian market provided by the Nepal-India Trade Treaty and speedy development of infrastructure in neighbouring countries resulting in rising demand have led to this growth.
There has been a substantial rise in the export of tea, instant noodles, ginger, plastic articles and large cardamoms during the period of 2004-08. Instant noodles recorded a growth of 36.9 percent while essential oil exports surged by 40.2 percent.
Trade experts have termed these changes as a gradual reflection of Nepal’s comparative advantages. “Our true comparative advantages are being gradually reflected with these changes,” said Ratnakar Adhikari, a trade expert.
The NTIS reveals that garments and carpets, the traditional export powerhouse, are slowly losing their clout. Garment exports that accounted for 26 percent of all goods exports in 2004 has declined to 11.5 percent in 2008. Though carpets still maintained a share of 12.1 percent of total exports, growth has been at 2.5 percent. The same is the case with vegetable ghee, zinc oxide and polyester yarn that used to be major exports to India. Their exports have been declining of late. “These products are gradually phasing out as they never had comparative advantages,” said Adhikari. He added that with proper branding and marketing, Nepali carpets still had potential in the world market.
Adhikari said that if value addition was done in vegetable products, Nepal’s exports would increase. The NTIS also said that products like ginger had potential for product diversification such as jam, jelly and candy.
Changes in importing countries have also been responsible for the transformation in Nepal’s export basket, said the NTIS. Asia, the Middle East and the Gulf have emerged as attractive export markets for Nepal’s agro food and service exports.
Rising stars of Nepal’s export
Products Growth
Iron and steel products 52.6 percent
Tea 36.1 percent
Instant noodles 36.9 percent
Ginger 34 percent
Wool products 15 percent
Plastic articles 15.6 percent
Coffee, tea, spices 24.6 percent
Source: Nepal Trade Integration Strategy 2010
Posted on: 2010-06-28 09:34
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