Note recall takes toll on Bhutan’s orange exports

NEW DELHI: Demonetisation initiative has not only been a setback for neigbhouring Bhutan's banking system but also hit one of it biggest exports to India — oranges in this season.

While poor cardamom yield disappointed farmers in Bhutan this year, the expectations of orange growers in the Himalayan state were high as orange production almost doubled in 2016 compared to last year. However, orange exporters are now being affected by the demonetisation of high-denomination Indian currency notes.

Bhutanese orange exporters rue that because of the demonetisation of Rs 500 and Rs 1,000 notes in India, they are being charged high rates for boxes to pack their oranges in. Transporters are also demanding extra charges if paid in Ngultrum, currency of Bhutan.

Orange exporters from Paro have been sending the fruit to India for the past decade. The yield and quality of the oranges this year are high but the demonetisation is affecting the business.

A Bhutanese exporter, who wished not to be named, said the exporters have to pay “miscellaneous” and “other unofficial bills” in Indian currency. As an interim measure, the exporters have arranged with the transporters to pay in Ngultrum (Nu) with the assurance that they will be paid in INR once it is available.

Exporters from Bhutan's Gelephu orange depot have been paying Nu 19,000 per truck to transport oranges till the Bangladesh border. But this year transporters are demanding more than Nu 20,000 per truck. The big oranges (meel) are fetching Nu 820 per box and the small oranges (keel) Nu 630 per box.

Export of oranges started in November and lasts till February next year. Bhutanese officials point out that if Bangladesh, Bhutan, India, Nepal (BBIN) Motor Vehicle Agreement (MVA) were in place, Bhutanese trucks would be transporting oranges all the way to Bangladesh and orange exporters would not be paying Indian truckers inflated prices.



Besides paying Indian truckers, orange exporters also need Indian currency to pay their labour and for boxes imported from India. Another fallout of the demonetisation process was the record low prices offered to potato farmers this year in Bhutan.

India is and will always remain Bhutan’s most important and easily accessible market but during emergencies, contingencies have to be in place to go directly to other markets beyond the neighbouring states, and perhaps even other countries like Bangladesh or Nepal, indicated officials in Thimpu.