KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Despite Nepal’s capacity for local coffee production, the country continues to depend heavily on coffee imports, revealing a significant gap between production and consumption.
This dependency persists even as the popularity of coffee culture grows, with cafes flourishing nationwide and coffee drinkers increasing.
The challenge lies in local production, which only totals 500 metric tons annually, far from meeting domestic demand, and highlights issues such as limited production capacity, infrastructure gaps, and insufficient investment in commercial farming.
Meanwhile, the stability of foreign exchange rates, with key currencies like the US dollar and euro maintaining steady values, reflects an overall consistency in the market, offering predictability for business and trade.
In the economic realm, Karnali Province aims for a 9.9 percent growth rate in its second five-year plan, up from the 4.1 percent achieved in the first plan.
However, overcoming infrastructure and resource management issues will be crucial to realizing this ambitious goal.
On a more local level, agricultural success stories, such as the shift to commercial banana farming in Parbat, demonstrate how alternative farming practices, like banana cultivation, are enhancing incomes and economic development, with farmers earning substantial profits.
These diverse sectors highlight Nepal’s economic potential but also underscore the need for improved local production systems to reduce reliance on imports and drive sustainable growth.
Nepal relying on imports despite local coffee production
Despite being a significant coffee-growing region, Nepal continues to rely heavily on coffee imports, highlighting a disparity between local production and consumption.
While coffee culture is rapidly gaining popularity, with cafes booming across the country and the number of coffee drinkers increasing, the domestic supply remains insufficient to meet demand.
Nepal imports coffee worth hundreds of millions of rupees annually, underscoring the limitations of local production, which totals just 500 metric tons across 43 districts.
This suggests that while Nepal has the potential to produce more coffee, challenges such as limited production capacity, insufficient infrastructure, and possibly a lack of investment in commercial farming hinder its ability to fully supply the growing domestic market.
Explanation sought from manufacturers on cement, rod prices hike
The significant price hikes in cement and iron rods have raised concerns within the government, as these materials are crucial for construction and infrastructure development.
The price increase of up to Rs 100 per sack for cement and Rs 15 per kg for iron rods could have a substantial impact on the cost of building projects, potentially leading to higher overall construction costs.
While manufacturers cite business losses as the reason for the price hike, the government’s inquiry indicates a need for transparency and accountability in pricing.
This situation underscores the delicate balance between business operations and consumer protection, particularly in sectors that directly affect the economy’s growth and development.
Foreign currencies remain stable today
The stability of foreign currency exchange rates today indicates a period of relative consistency in the market.
With rates for key currencies like the US dollar, euro, British pound, and Kuwaiti dinar remaining unchanged from the previous day, it suggests a steady demand and supply equilibrium.
The unaltered exchange rates, such as 135 rupees for buying one US dollar and 143 rupees for one euro, reflect minimal fluctuations in the currency markets, providing predictability for businesses and individuals engaged in foreign exchange transactions.
This stability is important for maintaining economic confidence, especially in a volatile global economic environment.
Karnali Province plans to post 9.9 percent economic growth
The Karnali Province Planning Commission’s discussions on the final draft of its second five-year plan reveal ambitious economic goals, with a target growth rate of 9.9 percent over the next five years.
This is a significant increase from the 8.8 percent target set in the first five-year plan, which ultimately fell short, achieving only 4.1 percent growth.
The second plan emphasizes good governance and a productive, employment-oriented economy to drive prosperity through social justice.
However, given the underperformance of the first plan, the challenge lies in addressing the factors that hindered growth, such as infrastructure limitations, resource management, and policy implementation, to ensure the ambitious targets are met.
Banana farming fetches Rs 150 million income annually in Parbat
Farmers in the Gyadi area of Kushma Municipality are reaping the benefits of shifting to commercial banana farming, with many seeing significant financial gains.
Over the past seven years, 65 farmers in Pipaltari and Katuwachaupari have replaced traditional rice and millet farming with banana cultivation across 1,000 ropanis of land.
This switch has proven profitable, with each farmer earning between Rs 50,000 to Rs 300,000 annually from banana sales, depending on the scale of their cultivation, which averages 5 to 10 ropanis per farmer.
The success of this venture highlights the potential of alternative agricultural practices to boost farmers’ incomes and contribute to the region’s economic development.
(Prepared by Srija Khanal)
Comment