Nepal's vegetable ghiu-hydrogenated vegetable oil-exports jumped by about 126 percent to Rs 1.09 billion in the first four months of the fiscal year, promising to reach 1999-2000 levels, if all goes well. Export of vegetable ghiu slumped to Rs 2.71 billion in the last fiscal year, a 14 percent drop compared to the sales in the previous year. Looking at the monthly average, ghiu exports are headed toward crossing the Rs 3 billion mark once again.

The 14 vegetable ghiu makers in Nepal have a total installed capacity of 220,000 tons and produce about 135,000 tons, of which about 80 percent is sold in nearby markets in India's Bihar, West Bengal and Uttar Pradesh states. It is also the one Nepali export that has faced stiff opposition from local Indian producers, who officials say have been badly affected by the imports from Nepal. Nepali ghiu is said to be cheaper and of better quality.

Indian officials have also singled out ghiu as a "problem product" saying it has grown just too fast. Capacity-wise, Nepali production does not compare with what the three states of Bihar, West Bengal and Uttar Pradesh can collectively produce. According to the 23rd Annual Report the Indian Vanaspati Producers Association, India's total installed capacity is about 3.8 million tons, with Bihar (111,000 tons), West Bengal (226,650 tons) and Uttar Pradesh (616,850 tons) capable of producing almost five times more ghiu than Nepal.