Thursday, January 30, 2014

Mushrooming trade fairs vs supply constraints

KATHMANDU, Jan 30: Poultry was quite new to Chitwan -- now the poultry capital of the country -- when a poultry fair was first organized there in 1996.

That fair is widely been credited for the boom of the sector in Chitwan, which now commands more than 50 percent of the total poultry business across the country.
The fair was a forum for both poultry entrepreneurs to explore new avenues and the development of this sector in the district.

More than Rs 10 billion has already been invested in the sector, annual turnover has reached Rs 20 billion and it also represents a significant chunk of employment in the district.
The district tops production of vegetables, honey, fish, dairy products and is now emerging as a leading banana growing district.

The secret behind farm commercialization there is the Chitwan Festival and the Agriculture Festival regularly organized on alternating years over the last two decades.
Both festivals have been proved to be instrumental in informing about modern technology and for sharing of ideas between farmers and experts.

News reports of different industrial and trade fairs being organized pour in on a regular basis from correspondents across the country.

However, the impact has not been as effective as the 1996 poultry expo in Chitwan as such fairs have not focused on increasing quality and supply of local goods in line with local and global demands.

Though such festivals, organized jointly by the government, local bodies and business associations, have served as a platform for showcasing local produce, they have not been able to promote local products at the local, cross-country and international levels.

In the absence of effective promotional activities on production to marketing of goods, such fairs are still forums for buying and selling of goods.
At a time when the country is suffering from a daily trade deficit of Rs 1.5 billion, such fairs could play significant roles in expanding the local and international markets for locally-produced goods.
The government introduced the Nepal Trade Integration Strategy (NTIS) -- a policy roadmap for promoting 19 chosen domestic products, 12 goods and seven services -- in 2010 in an effort to boost domestic supplies and enhance export capacity.

Under the NTIS list of goods, large cardamom, ginger, honey, lentil, tea, instant noodles and medicinal herbs/essential oils are agro-based goods while handmade paper, silver jewelries, iron and steel products, pashmina products and woolen products are industrial goods. Similarly, tourism, labor services, IT/BPO, health, education, engineering and hydro-electricity are services selected under the NTIS.

Ever year the winter season sees dozens of industrial and trade fairs aimed at introducing and further promoting local goods and services.

At a recent program organized by the Confederation of Nepalese Industries (CNI) in the capital, former Finance Minister Surendra Pandey drew an anecdote which summed up the reality of how weak the supply capacity of Nepali producers was.

“One trader from the UAE tried to import Nepali vegetables a few months back. He could not get sufficient quantity of vegetables from Nepali market to fill the required load for an aircraft. We can´t even guarantee the quality at a par with export standards,” Pandey said.

As Pandey said, Nepali exportable products are stuck with the twin problems of not being able to meet the required quality and quantity.

In a similar example, a Japanese trader offered Nepali tea producers a deal to supply tea to Japan. Although the Nepali traders were delighted to get the lucrative offer, their excitement evaporated when found out that the quantity of tea demanded by the Japanese trading firm was more than Nepal can produce annually.

China has offered duty-free access to around 8,000 products from the so-called Least Developed Countries (LDCs), including Nepal, and a huge number of Nepali goods have been getting similar access to India -- our largest trade partner.

Nepali goods are also enjoying a higher demand from other overseas markets. But, the only problem is the problem in guaranteeing quality and ensuring adequate supply as demanded by the importers.

Keeping in view the supply constraints of domestic goods, the government initiated support for the private sector in organizing regional trade fairs from this year.
The government allocated Rs 2 million for each regional industrial trade fair, to be organized in collaboration with the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).

Such regional trade fairs have already organized in Surkhet and Butwal while two more are scheduled in the central and eastern regions outside the capital. Besides, an international trade fair is also on the cards for Kathmandu this year.

“We started supporting the private sector to organize such regional trade fairs which could be instrumental in discussing different trade and industrial issues amongst the business people, the media and the central-level policymakers,” Toya Narayan Gyawali, the joint-secretary at the Ministry of Commerce and Supplies told Republica on Thursday.
Gyawali, who is also overseeing the implementation of NTIS, said such expos will provide opportunities not only for promoting goods, but also introduce new technologies being used in other countries.

“Trade fairs should not only be a venue for promoting goods, but also serve as a forum to exchange ideas and explore new business opportunities through open discussions between government officials and local producers,” Gyawali added.

Published on 2014-01-31 02:54:52

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