Floods in Nepal destroy merchants' stocks ahead of festival season
Sudden floods in Nepal destroyed shops and merchants' inventories ahead of the main Hindu festival season, when consumer spending in the country usually rises. According to The Japan Times, at least 1,000 importers were affected by the floods, according to Jayant Kumar Agrawal, secretary-general of the Nepal Foreign Trade Association.
Sixty-two-year-old textile trader Ashok Kumar Chaurasia said that while evacuating from Trishuli Bazaar, he escaped with his son and mother by riding a motorcycle to higher ground. The floods destroyed six of his shops and uninsured goods worth 45 million Nepalese rupees, or about $296,000.
Losses ahead of Dashain and Tihar
The disaster occurred ahead of the festival season, which runs from September to November and includes Dashain and Tihar. Traders had replenished their stocks in advance in anticipation of seasonal demand, but some goods were destroyed by water or blocked by disruptions on trade routes. At the same time, entrepreneurs still have to pay bank loans and suppliers' bills.
Replacing goods may become more expensive due to logistics disruptions. Insured companies may also face difficulties in documenting losses, as water washed away the offices and documents of customs agents. According to Nepal's National Statistics Office, private consumption accounted for about 82% of the country's GDP of approximately $45 billion in the financial year that ended in mid-July.
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Trade routes with China closed
The floods washed away Rasuwagadhi, Nepal's main overland trade route with China. Another main crossing point, Tatopani, has been closed to trade since August 29 after China cited the risk of landslides. Imports of goods and services amounted to approximately 35% of Nepal's GDP in the financial year that ended in mid-July.
SPG Automobiles, the Nepali distributor of Chinese car brands Omoda, Jaecoo and ICAUR, lost around 100 electric vehicles worth 450 million Nepalese rupees in the floods. Most of these vehicles had already been reserved by buyers, while another 700 to 800 cars were waiting on the Chinese side of the border. Company director Gaurav Sharda said rerouting could approximately double transportation costs and delivery times.
The Nepalese government announced free medical care at state hospitals and the provision of shelter for displaced people. The Ministry of Finance was also instructed to prepare a package of assistance, concessional financing and recovery measures for affected people and businesses. According to the publication, the floods claimed the lives of more than 1,200 people, and rebuilding the country could cost at least $5 billion.
