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The insurance sector, like many other industries, has been impacted by the recent economic recession. While the sector’s surface performance might appear stable, a closer examination of the data reveals that renewal charges are primarily keeping the industry afloat.

Across the 14 life insurance companies operating in the country, a total of Rs 156.331bn was collected in the past fiscal year, surpassing the previous year’s figures. The overall insurance amount increased by 9.82 percent annually, compared to Rs 142.35bn collected in the fiscal year 2022/23.

Notably, renewal charges have contributed more to the total revenue than primary insurance charges. Renewal charges accounted for 78.03 percent of the total, generating Rs 121.982bn, while primary insurance charges contributed Rs 34.34bn, or 21.97 percent of the total.

In the past year, 13,774,635 active insurance accounts were recorded, though the number of accounts has decreased. Despite this, total insurance collections grew due to higher individual insurance amounts, as noted by the insurance authority. Despite ongoing economic instability, Manoj Lal Karn, CEO of Himalayan Life Insurance, stated that the industry has not been significantly affected overall. He emphasized that the increase in renewal charges has driven growth in total collections. “Compared to the previous year, with nearly a 20 percent increase in income from insurance amounts, we should be optimistic,” he said.

Nepal Life Insurance led the industry in total collections for the fiscal year 2023/24, contributing 26.13 percent of the total. The company alone raised Rs 40.85bn out of the Rs 153.33bn generated by the 14 insurance companies, with 1,467,128 insurance accounts.

National Life Insurance ranked second, raising Rs 19.203bn, or 12.28 percent of the total, with 1,598,268 insurance accounts. Other companies followed, with Life Insurance Corporation (Nepal) Ltd raising Rs 18.1bn, Himalayan Life Rs 16.6bn, and Suryajyoti Life Rs 9.5bn. Companies that raised less than Rs 9bn include Rastriya Jeevan Beema (Rs 8.79bn), MetLife Insurance (Rs 5.67bn), Asian Life Insurance (Rs 8.8bn), Sun Nepal Life (Rs 3.88bn), Reliance Nepal (Rs 4.2bn), Citizen Life (Rs 6.21bn), Sanima Reliance Life (Rs 6.18bn), and Prabhu Mahalaxmi Life (Rs 4.37bn). Despite these figures, 57 percent of the population remains uninsured. As of 2023/24, 43.26 percent of the population had insurance coverage, a slight decrease from the previous year, when 44.38 percent of the population was insured.

Nepal continues to lag in insurance awareness and coverage compared to other countries. Unless required by law, the general public does not prioritize insurance. The government mandates vehicle insurance for compensation in case of theft, accidents, or other incidents. However, despite the legal requirement for third-party liability insurance, many remain uninterested in additional coverage. Officials cite a lack of awareness as a key factor in the limited reach of insurance among the population.

Millet, once considered a food grain for the poor, is now recognized as a ‘superfood’ due to its numerous health benefits. Consequently, both domestic production and import of millet have increased in recent years.

Millet can be cultivated in all 77 districts of Nepal. It thrives in dry and less fertile soil which makes it suitable for environments ranging from the Himalayas to the Terai. The government has provided over a billion of rupees in subsidies over the past five years to promote the production of indigenous crops, including millet. Additionally, the budget has directed authorities to incorporate millet into school meals to boost the consumption of healthy millet-based dishes.

The growing demand for millet is attributed to awareness of healthy lifestyle among the public. Millet is particularly beneficial for people with diabetes, which has contributed to its growing popularity. Even star-rated hotels have started offering dishes made from millet.

Traditionally, millet was used primarily for home-brewed liquor, but its production is now on the rise. Recently, millet is also being exported, though in small quantities.

327,000 tons annual production 

Dr Ramkrishna Shrestha, a joint secretary at the Ministry of Agriculture and Livestock Development, said that millet is cultivated on about 265,000 hectares of land, with an annual production of approximately 327,000 tons.

In 2017/18, 313,987 tons of millet were grown on 263,497 hectares of land, with a per-hectare yield of 11,092 kg. The production and productivity levels are similar today. Approximately 95 percent of millet is produced in hilly areas. Khotang, Sindhupalchok, Baglung, Syangja, Kaski, Okhaldhunga, Gorkha and Sindhuli are the major producers of millet in the country. Millet constitutes 7.7 percent of the country’s total food production and can be planted in high hilly areas up to 3,100 meters above sea level, according to Shrestha.

Rs 755m worth of millets imported annually 

With increasing demand, millet imports have significantly risen in recent years. According to the Department of Customs, Nepal imported 15.2m kilograms of millet worth Rs 754.43m in 2023/24. In 2022/23, the import was 18.4m kilograms worth Rs 732m.

In 2008/09, Nepal imported 12.37m kilograms of millet valued at Rs 65.32m.

Although Nepal is the world’s 13th largest producer of millet, its production is not sufficient to meet growing demand. Most of Nepal’s millet imports come from India.

A 2020 study by the Food and Agriculture Organization (FAO) found that Nepal produced 320,953 tons of millet that year, while India produced 12.49m tons. In the previous fiscal year, Nepal imported 15.29m kilograms of millet from India.

Nepal exported 3,500 kilograms of millet in 2011/12, which increased to 22,297 kilograms in 2022/23 and 46,758 kilograms in 2023/24, with an export value of Rs 6.19m.

Nepal exports millet to countries including Australia, Canada, Hong Kong, Italy, Japan, South Korea, the UK, and the US.

The United Nations General Assembly declared 2023 as the International Year of Millets to boost the crop’s consumption and production. Likewise, efforts are underway to designate Shrawan 15 (end of August) as National Millets Day.

Rs 1bn subsidy for promotion of indigenous crops 

The Ministry of Agriculture and Livestock Development has allocated more than Rs 1bn in subsidies over the past five years to enhance the production of various indigenous crops, including millet.

These conditional grants have been distributed to around 200 rural municipalities, which have received subsidies two or three times over the past five years. The subsidies were first provided to farmers in 30 local units in 2017/18.

The government also offers a subsidy of Rs 10 per kg if millet is sold in coordination with the relevant local unit.

With the global recognition of the importance of millet, donor agencies are supporting efforts to expand the production of indigenous crops. Dr Shrestha, a former chief of the Crop Development and Agricultural Biodiversity Conservation Center, said initiatives are underway to promote millet cultivation in Nepal, Bhutan and Bangladesh. The FAO has recently started efforts to advance millet farming in these countries.

The government is also developing a national framework outlining the responsibilities of all three tiers of government for promoting millet crop. The previous fiscal year’s budget included provisions to incorporate millet crops into school meals and authorized the Food Management and Trading Company to purchase millet from farmers.

Compared to other traditional crops, millet offers balanced nutrition, including protein, minerals, vitamins, and fiber, say experts. As a gluten-free food, millet is a suitable alternative for people sensitive to gluten, who may be at risk of non-communicable diseases and other health issues. This is why many people are shifting from wheat to millet.

Imported liquors worth Rs 40m, stored in a government godown, have expired in the lack of proper management.

Although liquors worth Rs 25m in the godown are fit for consumption, there has been no preparation to auction them off due to a lack of coordination among related agencies. Most of these liquors were imported from countries like France and Scotland without paying VAT and customs duty.

The liquors were purchased by National Trading Ltd—the state-owned trading company that is no longer in existence. The main objective of the company was to sell imported goods at reasonable prices to consumers. National Trading also used to sell goods at the duty-free shop of Tribhuvan International Airport (TIA) as well as to different diplomatic missions. However, expensive liquors bought in foreign currencies have been languishing in godowns for the past 15 years.

Branded whiskies, rum, vodka, gin and beer worth $563,564 are languishing in its godown in Ramshah Path. These liquors are worth more than Rs 74.95m in current market prices. However, most of them have expired.

The government merged National Trading with Nepal Food Corporation to form Food Management and Trading Company (FMTC) four years ago. However, no initiative was taken for the management of these imported liquors after the merger.

“When the government decided to remove duty-free shops from TIA, National Trading was in the process of purchasing goods worth Rs 320-330m. These goods were being purchased by taking bank loans,” Binod Kapali, one of the security guards deputed at the godown, said.

The godowns contain 103,933 liters of liquors of different brands. Of them, 95,898 liters of liquor have passed their shelf life. The remaining 8,034 liters can still be sold in the market, according to staffers of FMTC.

Six godowns of National Trading, which are now under FMTC, are filled with imported liquor. While investments of tens of millions of rupees have gone in vain, FMTC is also losing rental income from the godown due to its inability to manage the liquors. FMTC has deputed two security guards at the godowns. They are provided a daily wage of Rs 725 each.

Rabi Singh Sainju, former joint secretary of the Ministry of Industry, Commerce, and Supplies, said since there were many disputes with the then National Trading, the issue of what to do with these liquors also remained unsolved. "Regardless of the disputes, the concerned authorities should have already destroyed expired liquors and sold those fit for consumption," Sainju added.

Gajendra Thakur, a joint secretary who was transferred to the ministry recently, said he would work to resolve the matter at the earliest.

The godowns contain 15,009 bottles of whiskies, 8,641 bottles of brandy, and 60,600 units of canned beer. The beer cans were brought by paying $39,409. These liquors have already expired. Similarly, there are 1,327 bottles of champagne, 1,570 bottles of gin, 2,098 bottles of rum, 9,072 cherry liquors, 1,786 bottles of vodka, 18,508 bottles of wine, and 15,632 other liquors. Likewise, 129 packs of olive oil are also languishing in the godown.

Of them, 15,671 bottles of whisky, 8,609 bottles of brandy, 1,570 bottles of gin, 361 liters of rum, and 1,770 bottles of vodka are still fit for consumption. Most of these liquors are from popular brands like Beefeater, Gordon’s, Havana Club, Lamb’s, Negrita, Gautier, and Ballantine’s, among others.

Likewise, 2,119 cartons of cigarettes and tobacco and 129 packs of olive oil also need to be destroyed. Similarly, 3,725 units of nail polish, lipstick, bags, perfume, beauty cream, etc., have also expired. The procurement cost of these cosmetic products was $300,876.

Bim Bahadur Thapa, chief of the Sales and Distribution Department of FMTC, said these products cannot be destroyed immediately due to legal and environmental hurdles. “We are trying to find a solution,” he added.

Thapa said since most of these products were brought without paying customs duty, they will have to pay duty to the government if they are to be sold. “We will have to pay Rs 27.43m as duty for over 8,000 liters of liquor that are fit for consumption,” Thapa said. “Since these liquors are available at much lower rates in the market, it is becoming difficult to get rid of them.”

Margin lending by banks and financial institutions in Nepal experienced a significant decline over the past two years. However, it appears that investors, who were previously anticipating the central bank to relax restrictions on such loans, are now motivated to avail these loans. In the first month of the current fiscal year, ending in mid-August, margin loans of banks and financial institutions surged by 19.26 percent compared to the same period in the previous fiscal year, reaching Rs 76.53bn. Such loans stood at Rs 64.07bn at mid-Aug 2022. Margin loans refers to loans provided by banks by accepting shares listed on the Nepal Stock Exchange (Nepse) as collateral.

The total margin loans amounted to Rs 50.40bn in the fiscal year 2019/20. It, however, grew by a whopping 110.84 percent to reach Rs 106.28bn in mid-Aug 2021. Concerned by investment of over Rs 100bn in margin loans, the central bank imposed restrictions on such loans. As a result, such loans fell by 24.25 percent to Rs 80.50bn by mid-July 2022, further declining to Rs 64bn in the following month. However, margin loans have started to recover after the central bank eased restrictions on such loans.

The central bank initially restricted margin lending as it viewed share investment as an unproductive sector. The NRB took the decision after margin loans of banks exceeded Rs 1bn. The central bank first put a cap on margin loans at Rs 40m per investor per bank and Rs 120m in total. The introduction of the new margin lending provision had an immediate impact on the market, causing the Nepal Stock Exchange (NEPSE) index to plummet, reaching as low as 1,818 points from the all-time high of 3,198 points. The lower limit of Rs 40m was removed a year later, enabling individuals to borrow up to Rs 120m from a single bank.

Recently, the central bank further relaxed margin lending rules, permitting banks to invest up to Rs 150m for individuals and Rs 200m for institutional investors. However, investors, who had been advocating for the complete removal of lending caps, have not shown much enthusiasm as reflected in the low transaction volume on the stock exchange. Nabil Bank, Global IME Bank, and Nepal Bank Ltd are the largest providers of margin loans in the country. Until the first month of the current fiscal year, ending in mid-August, Nabil Bank had extended Rs 9.68bn in margin loans, while Global IME and Nepal Bank Ltd had invested Rs 6.28bn and Rs 4.09bn, respectively.

However, eight commercial banks have reported declines in margin loans. Rastriya Banijya Bank Ltd, Citizens Bank International, Sanima Bank, NMB Bank, Agricultural Development Bank, NIC Asia, Machhapuchchhre Bank, and Nepal SBI Bank have all observed a decline in their margin loans. While Standard Chartered Bank does not issue margin loans, other commercial banks have seen increases in their margin loans. Banks have extended margin loans from a minimum of Rs 24m to as high as Rs 9bn. Margin loans issued by development have increased by 21.28 percent to Rs 13.85bn as of mid-Aug 2023 compared to the same period in the previous fiscal year. In contrast, Class ‘C’ financial institutions have witnessed a decrease in their investments in margin loans. The total margin loans of finance companies have fallen by 4.17 percent to Rs 3.65bn in the first month of the current fiscal year compared to the same period in the previous fiscal year.

The tomato prices have surged in the domestic market due to an abrupt decline in supply. The daily supply at the Kalimati Fruits and Vegetables Market has dropped to 29-35 tons, down from 80-85 tons about a month and a half ago.

Tomato prices are currently hovering over Rs 100 per kg in the wholesale market, with retail prices reaching as high as Rs 200 per kg. According to the Kalimati Fruits and Vegetables Market Development Committee, tomato supplies in the market dwindled from 95 tons on June 17 to as low as 37 tons on Aug 8, marking a decline of more than 60 percent. Just two months ago, farmers were receiving less than Rs 2 per kg for tomatoes, causing traders to discard tomatoes on the streets as wholesale prices plummeted to as low as Rs 5 per kg.

However, the situation has now changed. Traders say that supply in the domestic market has dwindled due to increasing exports of tomato to India where prices have skyrocketed. Badri Lal Shrestha, a tomato farmer, explained that tomatoes are being exported to India through the Bhairahawa and Birgunj customs points, and some are even being sent through informal channels. An official from the Birgunj Customs Office acknowledged that tomatoes were being exported to India but in negligible quantities. Exports have been affected by heavy rains in recent days, according to the official.

Tomatoes are not commonly exported to India. The official said traders in neighboring Indian markets have turned to Nepali tomatoes due to higher prices there. Binaya Shrestha, the information officer of the Kalimati Fruits and Vegetables Market Development Committee, attributed the rise in tomato prices to the low supply. “While the daily demand in the market is around 60-65 tons, we are receiving only about 35 tons. This has created a mismatch between demand and supply which is reflected in market prices,” he added.

Shrestha said supply fell to 28 tons—one of the lowest in recent years—on Wednesday. “As tomato prices have also increased in India, farmers in the Tarai region, who would usually send their produce to Kathmandu, are now sending tomatoes to India. This has affected supplies in our market,” he added. The peak season for tomato production in Nepal is typically Dec-Jan. Additionally, farmers who cultivate tomatoes in tunnel farms around Kathmandu and nearby areas also harvest tomatoes in May-June. This caused prices to drop significantly in June. Although tomatoes are fetching good prices now, tomatoes in tunnel farms aren’t ready for harvest yet.