Nepali importers suffer as China continues to hold up shipments

Nepali importers suffer as China continues to hold up shipments

https://kathmandupost.com/money/2021/12/01/nepali-importers-suffer-as-china-continues-to-hold-up-shipments

Trader Dorje Lama of Bhotekoshi Rural Municipality, Listikot placed an import order with a Chinese company for readymade clothes in mid-August, expecting them to be delivered in time for the Dashain shopping season when Nepalis go on the year’s biggest buying spree.

The shipment was supposed to reach the Tatopani border, a major customs point along the Nepal-China border north of Kathmandu, within two weeks. But the cargo trucks never made it in time. They were stranded for nearly two months at the Chinese border town of Khasa while Lama fretted on the Nepal side of the border.

When Lama’s goods eventually arrived in Kathmandu in mid-October after completing all customs procedures, it was too late. Dashain shopping was over.

“We had the same bad experience during last year’s festive season. The goods were delivered after the festival shopping season had ended. We suffered a lot. It ruined our business,” said Lama.

“Selling clothes during the off season after Dashain is difficult. It causes us huge losses. The northern neighbour is behaving indifferently to traders,” he said.

Another businessman Amrit Karki too faced a similar misfortune.

“As the Chinese side is allowing only a limited number of containers to enter Nepal, we are not only facing delays and cost overruns, our goods are also being damaged, mostly perishable fruits and vegetables,” said Karki.

“We are not aware of China’s interest. But the traders are suffering.” According to Karki, only seven cargo containers are allowed to enter Nepal daily. These containers carry apples, ginger and readymade garments.

“If 30 to 35 cargo containers are permitted to cross into Nepal everyday, it will resolve most of the problems faced by Nepali traders,” said Karki.

It takes two weeks for goods to arrive at the Tatopani border from Khasa.

“Because of the proximity, traders started importing goods through the northern border point,” said Karki. “But they are finding out they made a bad decision.”

According to traders, they are having the same problem at the Rasuwagadhi crossing point further west on the Nepal-China border.

Many importers are rerouting their inbound cargo through southern border points to avoid losses and uncertainties.

“The condition of the northern border is also not good. It is even more difficult at the Tatopani border,” said another businessman Dhurva Thapa.

According to Thapa, delays in the delivery of goods and constant disruptions on the roads to Khasa and Tatopani due to floods and landslides have also resulted in higher transportation costs.

“The freight charges almost doubled when a bridge was washed away and the road was blocked in Liping during this rainy season,” said Thapa.

Ashok Kumar Shrestha, president of the Himalayan Cross-Border Chamber of Commerce and Industry, said that it had been months since they started submitting memorandums to make customs clearance at the border checkpoint easier.

“Under the pretext of earthquakes, floods and landslides, China has been discouraging bilateral trade,” said Shrestha.

“Traders, the Chamber of Commerce and Industry and the Himalayan Cross-Border Chamber of Commerce and Industry have been handing over memorandums to the prime minister, ministers and officials every six months demanding easier clearance at the Tatopani checkpoint,” said Raj Kumar Basnet, president of the Sindhupalchok Chamber of Commerce and Industry.

“After the prime minister and the Ministry of Foreign Affairs discussed easing procedures at the checkpoints some time ago, more than 25 to 30 containers started entering the country daily. But later the figure fell to the same 10-12 containers,” said Basnet.

According to Basnet, before the earthquake, the Tatopani checkpoint was fully open and Nepali traders could go to Khasa and other markets and bring up to 200 containers of goods daily.

“If 30 to 35 containers were released from China everyday, trade would be on track,” said Basnet.

Narad Gautam, chief of the Tatopani Dry Port and Customs Office, said six to seven containers mostly containing clothes, apples and garlic are entering Nepal everyday.

Tatopani Customs collected only 18 percent of the targeted revenue in the last fiscal year due to the declining trade volume.

Data shows that exports to China have been dropping in the past three years.

According to the Trade and Export Promotion Centre, exports in the last fiscal year 2020-21 fell by 14.7 percent from 2019-20 to Rs1 billion.

Total exports to China in 2018-19 were valued at Rs2.10 billion.

Imports, however, have shot up and stood at Rs94.30 billion in the first four months of the current fiscal year. The figure was Rs60.12 billion in the same period in the last fiscal year, according to the Department of Customs.

The government has been negotiating with Chinese authorities to allow more containers to pass into Nepal.

On November 23, Nepali Consul General in Lhasa Navaraj Dhakal tweeted, “A meeting was held with China’s TAR Port and commerce-related authorities. Discussions were made to increase the number of cargo going to Nepal from Kerung and facilitating speedy movement of fertiliser among others.”

He added, “TAR authority assured that they will increase the trucks to 20 trucks from Tatopani, facilitate the transport of 15,000 tonnes of fertiliser cargo and study to increase cargo from Kerung.”

The Post’s several attempts to contact Dhakal failed.

Naresh Katuwal, president of the Nepal National Traders’ Federation, said, “For a year, we have been saying that it is an undeclared blockade by China. The problem remains the same. And we do not know the reason behind this.”

Katuwal told the Post, “Though China has been assuring us that it would increase the number of containers, it remains as a promise only. Goods intended for the summer are arriving in the winter, and winter goods are arriving in the summer.”

He added, “Traders are not getting visas, and agents are fixing higher price tags on the goods which has also led to increased prices.”

Resham Bahadur Pokhrel, first vice-president of the Export Council of Nepal, said that exports to China had plunged by almost 50 percent compared to before the pandemic.

Urmila KC, under-secretary at the Ministry of Industry, Commerce and Supplies, said that China had increased the number of containers to 14-15 daily since a month and a half. But Nepali traders say that’s not true. 

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