While Nepal recorded a notable increase in export earnings from edible oil in the first 11 months of the current fiscal year, this apparent success has been offset by nearly equivalent imports of raw materials needed for its production. Data from the Birgunj Customs Office (BCO) reveals that Nepal imported raw soybean oil worth Rs 52.58 billion while exporting processed edible oil worth Rs 55.03 billion between mid-July 2024 and mid-June 2025.
This marks a dramatic jump in the import of semi-processed soybean oil, which was just Rs 7.37 billion during the same period last year. The surge in imports, nearly matching the export revenue, highlights Nepal’s continued dependence on foreign raw materials for its re-export-oriented edible oil industry.
In the case of sunflower oil, Nepal even experienced a trade deficit. Though exports brought in Rs 8.40 billion, imports of unprocessed sunflower oil reached Rs 9.75 billion in the same period—indicating that the export growth did not translate into net economic gain.
Officials at the BCO noted that Nepal is unable to capture the full benefits of edible oil trade due to the absence of domestic production of key raw materials. The industry largely capitalizes on the duty-free, quota-free (DFQF) market access arrangements with countries like India. This has encouraged traders to focus more on cross-border processing and re-exporting, rather than building a sustainable, value-adding agro-industrial base within Nepal.
Despite positive export figures, the lack of upstream supply chain development continues to limit long-term economic gains from the edible oil trade.
