Nepal's Edible Oil Imports Surge in First 10 Months of FY 2082/83

Kathmandu. Edible oil imports have increased unusually in the first 10 months of the current fiscal year. According to the latest detailed data from the Department of Customs, Nepal imported edible oil and oil-related products worth more than 145.33 billion rupees in the first 10 months (Shrawan to Baishakh) of the current fiscal year 2082/83.

According to the department, during this period, oil was imported in a total volume of 873.148652 million liters. The government has collected a total revenue of 10.476293 billion rupees from this large volume of imports.

In the same period last year, oil worth 120.67 billion rupees was imported, according to the department's data.

The main reason for such a large volume of oil imports in Nepal is the re-export model where Nepali industries import crude oil, process it here, and then re-export it to India.

Nepali businesses import crude oil from Argentina and Brazil and send it to India, taking advantage of the low customs duty under the South Asian Free Trade Area (SAFTA). There are about two dozen oil industries in Nepal.

Soybean Oil Imports Highest
Soybean oil accounts for the largest share among the imported oils. In the 10-month period, soybean oil worth more than 106.8245 billion rupees was imported. This is about 73 percent of the total import value. The high import is due to Nepal importing crude soybean oil, processing it here, supplying it to the domestic market, and re-exporting it.

After soybean oil, imports of sunflower and palm oil are also significant. According to the data, sunflower oil worth 17.5728 billion rupees was imported. Similarly, a total of 16.4230 billion rupees worth of palm products, including crude palm oil, refined palmoline, and palm stearin, have been brought in. Palm oil is mainly used for biscuits, noodles, and soap industries.

Which Oil Imported How Much?

From Which Countries is Oil Imported?
Argentina has become the largest source of soybean and sunflower oil for Nepal, while it depends on Indonesia and Malaysia for palm oil.

Soybean oil dominates Nepal's total oil imports. In the 10-month period, soybean oil worth more than 106.8245 billion rupees was imported. Its largest source is Argentina. More than 503.1 million liters of crude soybean oil were imported from Argentina for 81.7578 billion rupees.

Brazil is the second largest source, from which 84 million liters of oil were imported for 13.7442 billion rupees. Similarly, oil worth 6.2189 billion rupees (36.5 million liters) was imported from China. Other countries from which soybean oil is imported include Thailand (2.36 billion), Paraguay (1.47 billion), and the war-torn country of Ukraine (1.25 billion). Refined soybean oil has also been imported in small quantities from India, Kuwait, and Oman.

During this period, 105.7 million liters of sunflower oil worth 17.5728 billion rupees were imported into Nepal. Argentina is also the main country for this. 82.9 million liters of sunflower oil were imported from Argentina for 13.3605 billion rupees.

Besides soybean, sunflower, and palm oil, other special oils are also imported from various countries. Olive oil, considered beneficial for health, is mainly imported from Spain, Italy, and Turkey. Olive oil worth about 40 million rupees has been imported from Spain alone. Coconut oil is mainly imported from India and Malaysia.

Ukraine has become the second largest source of sunflower oil for Nepal. 22.1 million liters of oil were imported from Ukraine for 4.0389 billion rupees. In terms of other countries, 109.9 million liters from Malaysia, 30.8 million liters from India, and 20.6 million liters of sunflower oil and its raw materials worth 2.6 billion rupees were imported from Turkey.

Indonesia and Malaysia, Southeast Asian countries, have a strong hold on the import of palm oil and palmolelin. A total of 102.7 million liters of palm products worth 16.4230 billion rupees have been imported into Nepal. 60.4 million liters of palm oil and palmolelin worth 9.4559 billion rupees were imported from Indonesia alone. Similarly, 28.9 million liters of oil were imported from Malaysia for 4.8293 billion rupees. Besides these, data shows that palm oil worth 1.85 billion rupees was imported from Thailand and 239.8 million rupees from the Philippines.

Besides soybean, sunflower, and palm oil, other special oils are also imported from various countries. Olive oil, considered beneficial for health, is mainly imported from Spain, Italy, and Turkey. Olive oil worth about 40 million rupees has been imported from Spain alone. Coconut oil is mainly imported from India and Malaysia.

Similarly, raw materials and refined oil of mustard oil are mainly imported from India. Sesame oil comes from China and India, while corn oil is imported from Malaysia and Turkey. 'Talo', used for industrial purposes, is imported almost entirely from India.

Re-export to India After Importing from Third Countries
In the first 10 months (Shrawan to Baishakh) of the current fiscal year 2082/83, Nepal has earned foreign exchange worth 117.550334 billion rupees by exporting refined oil. According to the Department of Customs data, more than 588.3 million liters of various types of refined oils were exported during this period.

This export trade of Nepal is entirely dependent on neighboring India. More than 99 percent of the total export value is accounted for by the Indian market. Nepal imports crude oil from third countries, processes it here, and exports it.

According to the department's data, refined soybean oil is exported the most from Nepal. In the 10-month period, soybean oil worth 101.26 billion rupees was exported to India. Similarly, sunflower oil worth 7.41 billion rupees and various palm oil products worth about 6.61 billion rupees were exported.

Export Status

Although oil exports from Nepal are mainly concentrated in India, oil has reached developed countries in very small quantities. According to the department's data, mustard oil has been exported to Australia, the USA, and the UK. Mustard oil worth about 200,000 rupees was exported to the USA and 86,000 rupees to Australia. Similarly, vegetable ghee worth 100,000 rupees and mustard oil worth 82,000 rupees were exported to the UK.