Milk producers suffer market absence

By Prabhakar Ghimire & Krishna Bhandari

CHITWAN, Sept 23 - Steady growth in milk production but lack of capacity enhancement of dairy plant for the past 14 years, milk producers of this inner Terai district are facing problem.

Officials of Dairy Development Project admit that the production of milk is growing every year, but they have not been able to enhance the capacity of their plant and the farmers are facing problem of selling milk.

Besides this, frequent general strikes and blockade of roads obstruct them from selling their milk.

As most of the milk producers have taken loans from banks and financial institutions, it has been very difficult for them to repay the loans as they cannot sell their production.

Pradeep Kumar Pathak, Chairman of Nava Dugdha Utpadak Sahakari Sanstha (New Milk Producers’ Cooperative) Birendranagar, says as the farmers cannot sell their milk regularly, almost 75 per cent of the milk producers have been unable to repay their bank loans.

"The prices of fodder is ever-rising, but the price of milk is the same. Not only that they cannot even sell their production regularly. How can farmers sustain?," Pathak questions.

Shankar Raj Bhandari, vice-chairman of Milk Producers’ Association Chitwan District, says the production of milk is increasing by 20 per cent each year, but the capacity of the plant is the same for the past 14 years. That’s why, farmers cannot sell their production as they desire.

He says the total milk production in the district last year was 70 thousand litres, which has gone up to 85 thousand litres this year out of which the project buys about 25 thousand litres and private dairies buy more or less the same quantity of milk annually.

The plant’s capacity is the same for the past 14 years but milk production has surged. Moreover, the dairy products do not have reliable market. Therefore, the project is not in a condition to purchase more milk, says Ajab Lal Yadav, manager of the project.

But milk producers have been complaining of the dairies of buying powdered milk from India, which is cheaper than the liquid milk, and discouraging farmers. However, the owners of dairies refute the blame.

With an aim of leading the district in milk products, a powdered milk factory’s foundation stone was laid about five years ago, but not a single brick has been added to it yet.

The factory is said to have a capacity of processing 200 thousand litres of milk daily.

Only the operation of the powdered milk factory can be the sustainable measure to solve the present problem, says Yadav.

Nepal Development Bank allots shares

Post Report

KATHMANDU, Sept 23 – Nepal Development Bank Limited (NDBL) has allotted its share that was issued 75 days ago for the general public.

In a programme organized here today, a total of 456,000 units of shares were allotted to 24,896 individuals. The Bank had called the public sector for share investment on June 3. There was a total demand for 13,897,690 units of shares from 107,698 applicants, which was a subscription of over 19 times than the issuance.

Addressing the programme, Ram Babu Pant, Deputy Governor of Nepal Rastra Bank said that there is a need of "public accountability" and "transparency" in the financial institution to gain confidence from the investors.

Bijayanath Bhattarai, another Deputy Governor of the Nepal Rastra Bank, said, "The over subscription of the shares has indicated that the Bank has achieved huge supports from the public sector."

Mukundanath Dhungel, Executive Officer, Nepal Stock Exchange, Uttam Pun, the Managing Director at the NDBL also spoke on the occasion.

The Bank is the first private sector owned development bank that has been providing the nationwide banking service. The Bank has its central office in Kathmandu and a regional office in Pokhara.

TAAN officials elected

Post Report

KATHMANDU, Sept 23 - The 23rd Annual General Meeting (AGM) of Trekking Agents Association of Nepal (TAAN) has elected a 14 member executive committee for a term of two years here today.

Suman Pandey, Nima Noru Sherpa, Nabang Dorje Sherpa, Phurba Gyaljen Sherpa, Hari Kandel and Sita Ram Sapkota have been elected to the posts of President, First Vice-President, Second Vice-President, General Secretary, Secretary and Treasurer of the Association respectively.

In the like manner, the AGM also elected 8 executive members including 2 women and 6 men.

On the occasion, Yankila Sherpa, an MP emphasized that unless the unfriendly activities against the constitutional monarchy and multiparty democracy come to an end, tourism sector cannot progress, rather, it would face severe difficulties.

She also urged to maintain the quality of tourism in Nepal. "Since the trekking profession has highly influenced the tourism industry, the business should be competitive and professional," she said.

Rajendra Bantawa, President of TAAN, said, "The cancellation of Royal Nepal Airlines Corporaton (RNAC) flights to Europe has adversely affected the entire tourism sector and this has impacted the trekking sector, too."

He also said that trekking alone is the most reliable tourism-related business of Nepal that can compete in the world tourism market.

Presenting the progress report, Deepak Dhamala, General Secretary of TAAN expressed worry over the increasing number of unauthorised operators and said, "Efforts should be made to reduce the negative impact upon the whole tourism sector from such operators." He also said that the government is opening up more trekking routes at the initiative of TAAN.

Sange Dhoj Sherpa, treasurer of TAAN presented an estimated budget of Rs 4,272,500 and unveiled the financial activities of TAAN. TAAN has a total of 289 trekking agencies besides 11 associate members.

Economy, finance and market

By Supa Upadhyay

Domestic money market:

The Average Weighted Discount Rate (AWDR) of 91-day Treasury Bills (TBs) further rose by 36 basis points to 4.22 percent compared to 3.87 percent of previous week. The rupee was traded higher at NPR 98.96 and lower at NPR 98.95 for 91-day TBs. The NRB had received 18 bids worth NPR 1350 million against the notified amount NPR 750 million. The Repo rate for member banks and institutions have been quoted at 4.7219 for the trading days 18 to 24 September 2001. The outright purchase facility for bank, institutions and other on TBs is also available. In the regular weekly auction, the NRB is going to issue 91-day TBs worth NPR 600 million on September 25, 2001.

Domestic capital market:

A declining trend in the stock market gained momentum and bounced back to its previous two-week’s level, this week. This week, the NEPSE Index - 100 opened higher at 273.01 improved further in all consecutive trading days and eventually closed at 283.38 for the week, netting a sharp gain of 18.16 points over the week. This week, trading was estimated at 39219 shared valued NPR 2.06 million compared to 35613 shares valued NPR 14.5 million of previous week. Commercial Bank and Finance companies shared 89.05 percent and 9.91 percent respectively of total traded amount. Commercial banks, Production Sector, Finance/Insurance sector, and other sector improved. While, Hotel Sector and Business Sector remained unchanged. Out of thirty-eight traded companies, twenty companies improved, eight companies lost and ten traded companies remained unchanged at their previous prices. Bank of Kathmandu, Nabil Bank, and NIC Bank registered the first, the second and the third most traded companies trading 12968, 4000 and 3778 shares respectively. Share of Nabil Bank, Indosuez Bank, Standard Chartered, Himalayan Bank, Nepal B’desh Bank, Everest Bank, NIC Bank, Bank of Kathmandu, Everest Insurance, and Nepal Merchant Bank & Finance were able to trade in all five working days. Like wise, Nepal Bank Ltd, and Siddhartha Finance were able to trade in four working days.

Forex round-up:

The USD weakened against the EURO and JPY over the week but it improved against the GBP. The Fed and other Central banks have already pumped billions of dollars in extra reserves into their economics and arranged special currency swaps to address immediately liquidity problems. A series of coordinated interest rate cuts has sliced overight rates by 25 to 50 basis points in most of the world.

On the back of weaker dollar many regional currencies improved while INR remained very vulnerable and weaker against the dollar over the week. Despite the Indian currency market being relatively sheltered the US attacks had raised risks for the currency, analysts said. The NPR also buoyed by the INR depreciated 70 paisas against the dollar over the week.