Unmanufactured tobacco and refuse market in Nepal

Earlier Report Observations

From 2018 to 2023, the market volume for unmanufactured tobacco in Nepal grew from 7 264 tons to 9 094 tons, with notable increases in 2019 and again in 2022-2023. This expansion was primarily fueled by rising imports, which reached 7 778 tons in 2023, as domestic production remained relatively stagnant. A key factor was the reported decline in Nepalese tobacco cultivation, with land area shrinking by more than half since 2010, reducing local supply and increasing reliance on foreign tobacco.

Regulatory measures, including the introduction of designated licensed shops for tobacco sales effective March 15, 2017, and 90% graphic health warnings on packaging, aimed to restrict consumption. However, their impact on overall market volume was likely limited because tobacco excise taxes remained well below World Health Organization recommendations, keeping products affordable. Consumer preferences also gradually shifted toward smokeless tobacco products, reflecting changing health perceptions, but this did not reduce total tobacco demand.

The market faced regulatory uncertainty around alternative products, such as e-cigarettes, with court rulings lifting import bans in 2023. While this affected the broader tobacco landscape, the unmanufactured tobacco market continued to grow through increased imports, highlighting Nepal's dependence on foreign supply to meet persistent demand.

Production unmanufactured tobacco and refuse in Nepal

In kind, 2017-2020, t

Top producers of unmanufactured tobacco and refuse, 2017-2020

World map of production of unmanufactured tobacco and refuse, 2017-2020

Nepal's production of unmanufactured tobacco and refuse rebounded after two years of decline. In 2020, output reached 1 467 tonnes, marking a 20.0% increase from the previous year. However, looking at the broader period from 2017 to 2020, production actually fell by 14.9%, with a compound annual growth rate of -5.2%. The lowest production level was recorded in 2019 at 1 222 tonnes, which also saw the steepest annual decline of 16.0%.

Annual dynamics of production in Nepal in kind, 2017-2020, t

Exports unmanufactured tobacco and refuse from Nepal

Exports in kind, t

Nepal's exports of unmanufactured tobacco and refuse grew for the second year in a row. In 2020, export volume hit 59 tonnes, surging by 81.7% compared to 2019. Over the three-year span from 2018 to 2020, exports expanded dramatically by 725%, translating to a compound annual growth rate of 102.1%.

Annual dynamics of product's exports from Nepal in kind, 2017-2020, t

From 2017 to 2020, virtually all of Nepal's exports of unmanufactured tobacco and refuse in volume terms went to South Korea, which accounted for 100.0% of the total.

Structure of product's exports in kind by countries, 2017-2020

World map of product's exports from Nepal in kind, 2017-2020

Exports in value, K $ US

Nepal's export earnings from unmanufactured tobacco and refuse continued to rise for a second consecutive year. In 2020, exports amounted to 247 thousand US dollars, jumping 72.1% from 2019. Between 2018 and 2020, export value soared by 653.7%, with a compound annual growth rate of 96.1%.

Annual dynamics of product's exports from Nepal in value, 2017-2020, K $ US

During 2017–2020, Nepal's exports of unmanufactured tobacco and refuse in value terms were entirely concentrated on South Korea, representing 100.0% of the total.

Structure of product's exports in value by countries, 2017-2020

World map of product's exports from Nepal in value, 2017-2020

Imports unmanufactured tobacco and refuse to Nepal

Imports in kind, t

Nepal's imports of unmanufactured tobacco and refuse totaled 5 956 tonnes in 2020, down 11.2% from 2019. Over the period from 2017 to 2020, imports declined by 16.1%, with a compound annual growth rate of -5.7%. The lowest import volume was in 2018 at 5 817 tonnes, which also experienced the largest annual drop of 18.0%. In contrast, 2019 saw the biggest increase of 15.4%.

Annual dynamics of product's imports to Nepal in kind, 2017-2020, t

From 2017 to 2020, Nepal's imports of unmanufactured tobacco and refuse in volume terms came almost exclusively from India, which supplied 100.0% of the total.

Structure of product's imports in kind by countries, 2017-2020

World map of product's imports to Nepal in kind, 2017-2020

Imports in value, K $ US

In 2020, Nepal's imports of unmanufactured tobacco and refuse in value terms stood at 21 387 thousand US dollars, falling 14.2% year-over-year. Between 2017 and 2020, import value decreased by 16.3%, equivalent to an annualized rate of -5.7%. The lowest value was recorded in 2018 at 21 003 thousand US dollars, which also saw the sharpest annual decline of 17.8%. Conversely, 2019 registered the largest increase of 18.7%.

Annual dynamics of product's imports to Nepal in value, 2017-2020, K $ US

During 2017–2020, Nepal's imports of unmanufactured tobacco and refuse in value terms were almost entirely sourced from India, which accounted for 100.0% of the total.

Structure of product's imports in value by countries, 2017-2020

World map of product's imports to Nepal in value, 2017-2020