Ministry of Commerce And Supplies - Enhanced Integrated ...

N T I S2010The value of ginger export has been increasing over the years and has even doubled during the last 15 years.However, annual fluctuations are also very discernible during the last five years. In terms of quantity, morethan 75 per cent of the total ginger produced in Nepal is exported.Export Prospect: Export prospect seems very positive, with demand exceeding supply. Nepal is unable tosupply the required demanded quantity and cater for the expected fresh ginger market expansions of India.Niche markets for Nepali dried ginger in India are also expanding.There is a very high potential for diversifying Nepali ginger exports into processed products. Since dried gingerfetches relatively high prices in Indian markets. Traders believe that Nepal should export more dried thanfresh ginger. Besides dried ginger, other potential products include ginger oil and oleoresin, ginger powderand mixed spices, ginger candy and slices, etc. In Nepal, the potential for producing ginger oil is limited,the ‘nase’ variety is too fibrous and farming methods are inadequate to avoid an ‘earthy aroma’ in gingeroil. Production of oleoresin, on the other hand, is less sensitive to quality of inputs. Ginger oleoresin haswidespread uses as a flavouring agent in foods, beverages, and medicines. Ginger oleoresin is preferred inthese industries over the natural ginger due to the advantages that oleoresins hold over the spices themselves.These advantages include increased economy in use, more uniform flavour and concentration, and lack ofmicrobial contamination.Index 2: World Market ConditionsTable 2.5Total World Export Value of Ginger 2005-2009 (US$1,000):2005 2006 2007 2008 2009 2009321,704 247,995 264,599 339,275 n/a n/aSource: FAO Statistics. Nepal is the fourth largest producer after India, China, and IndonesiaMarket Access Conditions (Tariffs and NTBs): In terms of tariffs, Nepal enjoys a significant preference in India,which applies a 30 per cent MFN tariff on ginger imports, including imports from China. Pakistan applies a 15per cent tariff, with a 9 per cent reduced rate for Nepal as a SAFTA member. There is, however, no significanttariff advantage for Nepal compared to China, the main competitor, in any of the other major importingmarkets. 8Nepal enjoys free access to India’s markets but faces various non-tariff measures. A range of different feesare levied on Nepali ginger. The total cost of these amounts to NRs 170/MT, approximately 1 per cent ofthe cost of ginger exported to Gorakhpur in India. Nepalese exporters can only sell their produce to licensedIndian traders. This limits Nepalese exporters in their choice of traders, as many Indian traders do not havePAN (traders’ registration under the Indian Act). India also applies SPS measures. While authorities in Nepalrequire consignments of ginger to be issued a phytosanitary certificate, all ginger entering India from Nepalhave to undergo a further pesticide residue test at border crossings. The samples are not tested at bordercrossings, but are sent to specific locations, often in each state capital that has been allotted by the Indiangovernment. It takes about three days for the result to return, during which time the truck has to wait atthe Indian custom point. Also, Nepalese trucks are not permitted to enter India, which means that theconsignment has to be re-loaded onto Indian trucks at customs crossings. All these obstacles add costs to the8The USA applies a very low MFN tariff for ground ginger (around 0.5 per cent), and a zero rate for others. Japan grants duty-free access to bothChina and Nepal. The EU and Malaysia apply a zero MFN rate.NEPAL TRADE INTEGRATION STRATEGY 2010BACKGROUND REPORT29