Basmati lovers drive up rice import bill

May 19, 2017

The Kathmandu Post, Sangam Prasain. 19th May 2017, Kathmandu

Nepal’s cereal imports swelled by double digits despite a record food grain harvest this fiscal year, as consumers asserted their preference for aromatic basmati rice from India over the local product.

Long grain basmati rice holds a unique charm in global markets including Nepal, and this has resulted in a growth in rice imports although the country produced surplus grain, agro experts said

According to the Trade and Export Promotion Centre, Nepal imported cereals worth Rs29.41 billion in the first nine months of the current fiscal year, up 11.9 percent from the same period last year. In the previous fiscal year 2015-16, cereal imports totalled Rs39.34 billion. 

Meanwhile, Nepal Rastra Bank’s statistics show that of the total cereal imports, the rice import bill came to Rs18.52 billion in the first nine months of the current fiscal year. The figure represents a 15.9 percent rise year-on-year. 

Paddy production jumped to an all-time high of 21.66 percent to 5.23 million tonnes this fiscal year, after two consecutive years of falling harvests triggered by drought. The country produced an additional 931,248 tonnes of paddy this year. In the last fiscal year, a crippling drought hit paddy production severely, dragging it down by 10.22 percent to 4.29 million tonnes.

Based on the average price of Rs21.45 per kg set by the ministry, this year’s output is valued at Rs113 billion, excluding the value of straw and husk. 

Although officials of the Ministry of Agricultural Development had estimated that the record harvest would bring down the country’s rice import bill, this did not happen. 

“It’s not surprising. The record paddy output this year has not dented the import bill because the expanding population of middle income Nepalis prefer to eat basmati rice,” said Bhola Man Singh Basnet, an agro expert and scientist. “We don’t have sufficient production of fine rice like basmati, so demand is met by imports.” India is the sole exporter of basmati rice to Nepal.

According to Basnet, there seems to be a direct link between remittance and food habits in Nepal. “Nepalis have been earning more from the last couple of years, and demand for basmati rice has grown accordingly.”  

He said that Indian basmati rice was much cheaper compared to Nepal’s product due to the low cost of production and India’s heavily subsidized farm sector.  

The per capita rice consumption in many Asian countries has decreased as a new wealthy middle class replaced simple rice meals with meat-laden and Western style food, experts said. 

As per the Ministry of Agricultural Development, a Nepali consumes an average of 191 kg of food every year—90 kg of rice, 45 kg of maize, 45 kg of wheat and other foods like meat and dairy products.  

“Food habits in Nepal have not changed much. Eating white rice twice daily makes you weak,” said Yogendra Kumar Karki, spokesperson for the ministry. 

The contribution of rice to the energy intake in Nepal needs to be decreased and replaced by wheat, beans and other crops. “We have been launching various programmes and projects to educate people and encourage them to change their food habits.” 

He added that the government would be establishing a corn flake mill in the Eastern Region to promote cereals made by toasting flakes of corn and wean people away from traditional beaten rice.