Vegetables worth INR 85M exported in less than two months
Rajesh Rai | Phuentsholing
Transaction through the formal banking system has become as smooth as the outer covering of some vegetables exported to India, earning the much-needed Indian Rupee (INR).
After the Royal Monetary Authority (RMA) announced that exporters of vegetables must make formal payments starting from September 5 this year, the auction yard of the Food Corporation of Bhutan Limited (FCBL) head office in Phuentsholing exported 2,571 metric tonnes (MT) of red and white potatoes, which is worth Nu 62 millions (M) and 917MT of other vegetables worth Nu 23M.
This means FCBL received INR 85M between September 5 and October 25 this year.
Overall, this season, which started in June, FCBL auction yard in Phuentsholing exported 3,960MT of potatoes worth Nu 97M and other vegetables (cabbage, carrot, beans, cauliflowers, green chillies, and radish) worth Nu 24M.
Although Bhutan and India had been trading vegetables from Phuentsholing for ages, formal banking methods were never used for payments. Jaigaon traders who imported and distributed vegetables across India were paid in Rupee, but Bhutanese exporters received cash in Ngultrum.
The FCBL auction yard manager, Ugyen Penjor said they have not come across any issues in receiving payments through banks.
“We have an understanding with our Indian vendors that the payment must be made within 10 to 15 days after the export,” he said.
FCBL has registered 18 traders from across the border, who import from the auction yard.
As per the RMA directives, exporters have to maintain trade receipts with the importers across the border in Rupee through banking channels as per Section 24 of the Foreign Exchange Rules and Regulations (FERR) 2020. Exporters exporting to India must obtain a Bank Export Registration (BER) before processing the export declaration at the customs point of exit.
Exporters submit a filled BER to their respective banks, following which the banks will endorse the form. Exporters will then submit the endorsed BER form at the customs point of exit for processing the export declaration. All these procedures will have to be carried out after Bhutanese exporters receive purchase orders from their parties.
Good potato season
Meanwhile, the complex manager Ugyen Penjor said farmers are receiving good rates for potatoes this year. “However, the rates have decreased in the last three days,” he said.
Yesterday, a kilogram (kg) of large-sized potatoes was auctioned at Nu 28, while the medium and small-sized were exported at Nu 25 and Nu 15 respectively. The rates were slightly higher three days ago.
White potatoes, which come from Phobjikha, Ugyen Penjor said, were auctioned at higher rates compared to the red ones. The medium and small-sized white potatoes were auctioned at Nu 30 and Nu 31.
Export of potatoes was severely affected during the pandemic in 2020. Phuentsholing auction yard recorded 78MT of potatoes, which is worth Nu 23M.
However, exports improved in 2021. A total of 3,854MT of potatoes worth Nu 72M were auctioned and exported from Phuentsholing, according to FCBL.