Nepal Bans Food Grain Exports To Prevent Shortages

Nepal Bans Food Grain Exports To Prevent Shortages
DPA, 1-May-08

The Nepalese government Thursday banned the export of food grains, including rice, in the face of rising prices and fears of food shortages.

The Nepalese government said the decision was to maintain stocks of food and followed similar steps by its neighbour India.

``In view of demands of food grain in international market and to prevent deterioration of food security in the country, the government has stopped export of rice, wheat and paddy with immediate effect,'' the Ministry of Industry, Commerce and Supply said.

The move followed growing concern in Nepal over the rising cost of rice, the staple food for most Nepalese.

The Nepalese central bank said the price of rice had risen by almost 30 per cent in the past three months, mainly due to the rising cost of rice and paddy in international markets.

The government ban is seen as an attempt to curb exports of rice by farmers and businessmen to India for better prices despite Nepal being a major importer of rice.

The ban imposed by India in its export of rice and paddy had directly affected the price of those essential goods in the Nepali market.

Prices of food items have skyrocketed in the market over the last three months. If the trend continues foods and oil will become unaffordable for the general public, say market analysts.

``But the situation can fast turn worse,'' warns Puskar Bajracharya, an economist who has been involved in extensive research in urban poverty. ``With essential commodities becoming unaffordable, risks have increased for wage earners, unemployed and low income groups failing to meet their calorie requirement.''

According to the Food and Agriculture Organization, 4.3 million tons of rice was harvested in Nepal in 2007 but the country ended up exporting some of its production to India despite Nepal's annual rice deficit.

Nepal imported 26,448 tons of paddy and 3,276 tons of rice from India in the first quarter of the current fiscal year.

About 3.8 million people in Nepal would face food insecurity in the coming months due to a combination of sharp increases in food prices and political instability in the southern part of the country, according to the UN World Food Programme in Nepal.