The economic survey for the fiscal year 2010/11 shows that the price of vegetables in the Kathmandu Valley increased by a whopping 104 percent during the period. Ineffective distribution system, arbitrary price fixation by traders and supply constraints due to bandas and strikes are the major factors behind heavy rise in fruits and vegetable prices.[break]
“Unmanaged distribution system, increasing involvement of middlemen and low rate of return for farmers are the key reasons behind rising fruits and vegetable prices in the market,” said Bharat Khatiwada, president of Kalimati Vegetable Wholesaler´s Association.
The price of popular vegetables like onion, potato and ginger among others increased by 37.8 percent, 19.8 percent and 9.8 percent respectively during the period.
Rudra Bahadur Pathak, general secretary of Nepal Fruits and Vegetable Trade Association, said prices of popular fruits like apple, banana and mango among others has increased in the range of 30 to 50 percent this year, as compared to prices recorded last year. He blamed illegal taxation, which is collected in more than 10 places while importing fruits and vegetables to the Valley, as the other reason behind heavy surge in prices.
“We are compelled to pay about Rs 10,000 per truck while importing fruits to the Valley from eastern Nepal. This raises cost by about Rs 2,000 per truck,” Pathak told Republica.
Traders suggested that the government provide subsidy and incentives to farmers so as to boost production and put in place an effective distribution mechanism to check price hike.
Traders say the onset of monsoon coupled with the drop in production have caused the price of popular fruits and vegetables to soar up in the market by as much as 20 to 25 percent this season as compared to the prices recorded in the same period of last year. Low supply of fruits and vegetables from the neighboring countries like China and India - two major source countries - in recent weeks has also caused the prices to soar.
“Heavy rain has affected production of banana and mango across the country,” Pathak said, adding, “Even supplies from India and China have declined drastically.”
Meanwhile, prices of popular fruits and vegetables have increased in the range of Rs 10 to Rs 15 per kg as compared to prices of a week ago. Daily arrivals of vegetables at the Kalimati market hover around 350 tons, down from average daily arrivals of 500 tons during monsoon.
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