Bhutan's orange traders hit by dollar dip

BANGE BAAZAR (BHUTAN): A drop in the dollar’s exchange value is eating into the profitability of Bhutan’s citrus mandarin or orange traders and their financiers, many of whom are Indians.

Bhutan is witnessing good value for its orange exports in dollar terms, compared to last year. Bange Bazaar is a major makeshift orange trade hub situated on Torsha river bank near Phuentsholing at the Indo-Bhutan border. According to traders there, the price this year has already touched $11 a box, against the highest price of $9 realised last year.

“However, a major portion of our profit is lost due to devaluation of the dollar this year, especially for the portion of our exports that goes to Bangladesh,” said trader B Wangdi. For exports to India, payments are mostly realised in the rupee but for those to Bangladesh, the exchange medium is in dollars, according to Mr Wangdi.

As learnt, the Bange Bazaar market alone exports around 60,000 tonne per annum to Bangladesh. Out of around 150 major traders in the market, a good number are directly or indirectly financed by Indian financiers, mostly in an unorganised fashion. Eventually, the fall in profitability due to dollar devaluation is causing losses for them too.

Beside hydropower, orange is a major export commodity for import-oriented Bhutan, delicately maintaining the country’s huge negative trade balance at an acceptable limit. It also contributes to a great extent to the microeconomy of the country.

Farmers, horse owners carrying stock to trade points, packers in Bange Bazaar making the crates and porters all directly benefit from the huge volume of cross-orange trade. “However, though the price realised this year was appreciable, it has become difficult to keep it stable due to the huge volume of supply coming from the interiors,” said trader D Yolmo.

“The exchange value devaluation of the dollar could not yet pull our net profit this year below last year’s. However, it may happen anytime if the price in dollar terms goes further down,” he added.