A sour orange business

Export: Exporters and suppliers involved in the citrus mandarin (orange) business are starting to feel the ripple effects of the poor orange production in the last season.

While orange growers across the country may have ended with a season, too sour to remember, exporters are now chasing their suppliers to secure the advance money they paid during the season.

Orange export business involves three parties besides the growers. Financial institutions provide seasonal loans to exporters from across the country and these exporters distribute the same capital to mandarin suppliers or the middlemen.

With a record low production, the country exported 4,959 metric tonnes (MT) of mandarin to Bangladesh and India in the 2015-2016 season. This is a slump of more than 500 percent from the 2014-2015 season. Total export in 2014-2015 was about 34,569MT.

Without business, exporters have now started to default with the banks. Financial institutions have started to “catch” the exporters and in turn the exporters have started to catch their suppliers.

In this cat and mouse game, few suppliers were even detained for days in Phuentsholing, the country’s commercial hub from where mandarin is traded the most. From what the exporters share, more than 20 suppliers have been dragged to the Phuentsholing dungkhag court.

Situ Lal Koirala, a supplier from Tsirang is one of them. Failing to return the capital he took from an exporter, the 60-year-old was also detained for more than a month after the exporter reported him to the police.

Situ Lal Koirala’s wife Badra Maya Koirala was at the Phuentsholing dungkhag court on March 3. “My husband has low blood pressure,” she said. “I have nobody for help.” Her husband had taken an advance of Nu 300,000 in October 2015 from an exporter based in Phuentsholing. And this is not the first time he had taken an advance.

Sources said that he had served a prison term in another dzongkhag for similar reasons of taking advances and not delivering. After he was released on March 4, his exporter had given him six weeks time to return the money, failing which he would lose the land he mortgaged with the exporter.

Peling Export owner Pemba also has been frequently visiting the court in Phuentsholing. He has taken around six suppliers from across the country to the court.

“The bank is after me,” the exporter said. “I had to drag the suppliers to the court because they are not cooperating.”

One supplier that Pemba had given an advance payment was also jailed for about 40 days. The supplier was released on March 3 after his wife and father-in-law paid some amount and promised to pay the remaining in a specified time.

From Nu 510,000 the supplier is supposed to pay, the wife and the father-in-law paid Nu 100,000. The supplier’s family paid Nu 89,000 in cash and offered bangchungs (cane plates) worth Nu 11,000 to Peling Export.

Pemba said he has Nu 9.6M to collect from the suppliers.

Another exporter, Nim Tshering, meanwhile, has taken more than 10 suppliers from across the country to the Phuentsholing dungkhag court.

“It is awkward but we had to call them to court,” the exporter said, adding his export business had huge overdues with the banks.

Nim Tshering claimed that his suppliers owe him Nu 20M. “There are still many suppliers I have to deal with in the court,” he said.

Another exporter, Sonam Tobgay had also registered a case in court. Sonam Tobgay said suppliers have genuine reasons as the season was not good, but he said some suppliers misused the advance money.

Exporters, meanwhile, said that they would consider giving their suppliers another season, provided financial institutions considered their grievances. “If not, many suppliers may have to surrender their properties and land mortgaged with us,” said one exporter.

Rajesh Rai, Phuentsholing

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