By Our Correspondent Biratnagar, March 1: The ongoing war between Russia and Ukraine has worried everyone around the globe, and Nepalis are no exception. At the same time, discussions have started in Biratnagar and Birgunj, the two business centres of the southern plains, about the problems the Russia-Ukraine war could create in Nepal. The industrialists of Biratnagar have feared the possibility of raw materials shortage for the local ghee and oil industries.
Stating that there is a problem in importing raw materials from Ukraine and Russia, they have complained that it will affect Nepal's ghee and oil industries. Crude sunflower oil is being imported to Nepal from Ukraine and Russia.
The industrialists, who have been importing 80 per cent of the raw materials required by the industries from the two countries, have said that they are in trouble due to the current row between the two countries. Bipin Kabra, treasurer of the Chamber of Industries, Morang, and operator of Quality Oil Refinery, said that the shipments have been cancelled due to the rush of ships from the ports of both the countries.
The industrialists used to import sunflower and soybean to Nepal from Ukraine and Russia. Kabra claimed that Nepalese banks have stopped opening LCs to import goods from Ukraine. According to the industrialists, import of raw materials will be affected as it is difficult to order goods from Russia through the Swift system. The industrialists have estimated that there will be a shortage of crude oil not only in Nepal but also in India.
Director of Pashupati Edible Oil Industry Amit Sarda informed that loading and shipment from both the countries have been stopped. Sarda claimed that the Nepali importers were paying damage and detention charges when the cargo ships stopped at the ports of Ukraine and Russia for 10 days.
He said that after the disturbance in supply from Ukraine and Russia, process of importing crude sunflower and soybean oil from Paraguay and Turkey would be expedited. However, the price of sunflower and soybean crude oil has risen by USD 150 per tonnes in the last 10 days in other countries as war continues in the main oil producing countries, said Sarda. Ten days ago, the price of crude sunflower and soybean was USD 1,600 per tonne for Kolkata. Now it has reached USD 1,750 per tonne.
According to our Birgunj correspondent, the import of goods from Ukraine through Birgunj Customs Office has declined due to the tension between Russia and Ukraine. During the first seven months of the current fiscal year of 2021/22, goods worth about Rs. 6 billion were imported from Ukraine through Birgunj and the customs office collected revenue of Rs. 1.265 billion.
In the same seven-month period, India ranked first among 86 countries from where imported goods arrived in Nepal via Birgunj, while China was second and Ukraine ranked fifth. Entrepreneurs said that after the outbreak of war between Russia and Ukraine, problems have started to appear in the supply of raw materials of edible oil, livestock grains, food and clothes to Nepal.
According to Nikhil Chachan, director of Narayani Oil, consignments of semi-refined sunflower and soybean oil from Ukraine have been cancelled. He claimed that the quality of mustard grown in Ukraine is better than that of other countries and that the industrialists were importing most of the mustard they need from Ukraine. Over the past few years, most of the imports and exports of sunflower, soybean oil and palm oil take place from the Birgunj Customs.
Traders were importing semi-refined oil of sunflower and soybean and sunflower and soybean seeds from Ukraine and other countries and processing them here before exporting them to India. According to customs, peas and mobile equipment, readymade garments are also imported from Ukraine through Birgunj, while paintings, carpets and tea are exported to Ukraine.
In the last seven months, Nepal has exported paintings, carpets and tea worth Rs. 1.578 million to Ukraine, according to the data released by the customs. According to OBC Food operator Suresh Rungta, ships carrying raw materials have been stopped at the port due to the war.