Ministry of Commerce And Supplies - Enhanced Integrated ...

N T I S2010Nepal’s World Market Share: Nepal’s annual production of honey constitutes less than 0.05 per cent of worldproduction, and the share in world exports is negligible.Trade Balance: Nepal imports small amounts of honey for domestic consumption from India and, according toindustry sources, also from the USA, China, and Saudi Arabia, but these imports remain very small. Only India’strade data shows exports to Nepal (around US$70,000 per year).Dynamism of Exports: The destinations for Nepal’s honey export to overseas markets are erratic: somedestinations drop and new destinations are recorded every year. Even Nepal’s diverse portfolio of destinationcountries has dwindled. Nepalese honey has been banned from entering the EU countries (and also Norway)due to the non-submission of national residue plans. India, on the other hand, has been a steady market.Export Prospect: Nepal faces export restrictions in a number of markets. The government has responded byprescribing mandatory standards for honey production. However, Nepalese standards for honey do not meetinternational standards, including a number of Codex parameters such as electrical conductivity, Diastase unit(Schade Scale), Invertsae (Siegenthaler unit) and Proline. This makes it difficult for Nepal to overcome exportmarket restrictions. In addition, without a significant increase in production, honey exports will remain smallin absolute terms. Even if all of Nepal’s current honey production were exported, exports would still be small(< US$2 million at current wholesale prices).Index 2: World Market ConditionsTable 2.9Total World Export Value of Honey 2005-2009 (US$1,000)2005 2006 2007 2008 2009 2009752,599 818,485 918,015 1,226,758 n/a n/aSource: TradeMap (import data).Market Access Conditions (Tariffs and NTBs): Nepal would enjoy a significant tariff advantage for its honeyexports compared to some of the main competitors (in particular China and Argentina) in both EU and Japan.Japan applies a 30 per cent MFN tariff and 25.5 per cent to China, while Nepal would enjoy duty-free access.The EU’s MFN tariff is 17.3 per cent, which also applies to most non-EU suppliers, and Nepal has duty-freeaccess. The USA has a low tariff and imports mainly from Canada. Anti-dumping duties apply against exportersfrom some countries, including China and Argentina. But such preferences are not a sufficient condition forany exports and the main challenge for Nepal will remain to be able to export commercial quantities neededin these markets and to overcome the SPS barriers. Nepal has already suffered from the SPS measures inthe form of Pesticide Residue Content in its export to Norway. Nepal, to be eligible to export honey to anyEU member country, will have to be listed in the EU as authorized country for import, under EU Directives92/118/EEC of 17 December 1992. For that purpose, it has to submit national residue plans, guaranteeing themonitoring of the groups of residues and substances identified by the EU. However, it has not yet submittedits national residue plans, and, therefore, is banned from exporting honey to the EU member countries. Asimilar situation applies to export to Korea.Access to Nepal is free and only subject to small nominal fees and a large share of the trade probably occursinformally anyway.Major Competitors in World Market: Since Nepal’s honey has free access to the Indian market and as tradingtakes place in an informal manner, mainly through bordering Indian cities and towns, traditionally Nepal’smain competition comes from the domestic supply of honey in India. Honey is now imported from countriesNEPAL TRADE INTEGRATION STRATEGY 2010BACKGROUND REPORT35