February 27: The Russian invasion of Ukraine has affected the world economy, including Nepal. The price of sunflower and soybean imported from Ukraine has gone up by 30 to 60 percent per tonne. Industrialists have estimated that the price of cooking oil in Nepal will increase by up to Rs 100 per litre within the next one month.

The price of mustard, which was ordered from Ukraine by domestic oil industry operator Shravan Kumar Agrawal, has recently increased by USD 30 per ton. Due to the war, it was not possible to order additional consignment of mustard from Ukraine, so the industrialist had to order mustard from Australia, where it costs an additional USD 60 per ton. 

"The price of mustard oil may increase by as much as Rs 100 due to price hike of mustard seeds, increase in transportation fare and the delay consignment delivery," said Agrawal.

At present, the retail price of mustard oil is Rs 300 per liter. He estimates that the price will reach Rs 400 in a month. Sunflower oil costs Rs 260 per liter. It is expected to increase to Rs 360. The current retail price of soybean oil is Rs 250 per liter, which is expected to cost Rs 350 per liter soon.

Russia's conflict with Ukraine has caused impacts on various sectors globally. Entrepreneurs said that increase in coal price will increase the production cost of the brick and cement industries.

According to Bhim Ghimire, president of Province 1 chapter of the Confederation of Nepalese Industries, the price of coal has also been affected by the Russia-Ukraine war. Traders at the Kolkata port, who have been supplying coal to Nepal, say that the price of coal has gone up by USD 30 per ton. The price of coal was USD 200 per ton a year ago, and has now reached USD 230 per ton. According to Ghimire, the price is expected to reach USD 250 per ton.

Ukraine supplies most of the raw materials required to produce sunflower oil in Nepal. Only a few percent comes from Russia and Australia. The price of soybean and sunflower is comparatively cheaper in Ukraine than in other countries. 

Nanda Kishore Rathi, vice-president of the Morang Chamber of Commerce, said that the price of crude oil, which used to cost USD 1,500 per tonne, has now risen by USD 30 to 300.

Nepal has imported 445,000 kg of raw material of mustard oil worth Rs 3.95 billion in the last seven months, while 57.36 million kg of crude oil worth Rs 9.51 billion has been imported from Ukraine.

Along with Ukraine, Russia has also exported goods worth Rs 151.1 million to Nepal in the last seven months and imported goods worth Rs 4.31 billion, according to the Department of Customs. During this period, Nepal imported printing paper, automobiles, chemicals (sodium phosphate), animal vaccines, shampoos, baby lotions, and cosmetics from Russia. Carpets worth Rs 73.9 million, tea leaves worth Rs 61.3 million, hangers for clothes worth Rs 1.1 million, and Yarsagumba worth Rs 6.5 million were exported to Russia.

The war between Russia and Ukraine has pushed up the price of gold and petroleum products, said Navin Rijal, president of the Morang Merchants’ Association. He informed that the price of gold in Nepal increased by Rs 2500 per 11.6 grams on Thursday and decreased by Rs 1000 on Friday. The price of crude oil, which had reached USD 105 per barrel, had reached USD 97.2 at midnight on Friday.

As Russia is the second-largest producer of petroleum products internationally, fluctuations in prices are likely to push up the price of petrol, diesel, kerosene, aviation fuel, and cooking gas in Nepal, Rijal said.