Food prices expected to rise: Report

Published On: August 20, 2016 12:30 AM NPT By: Republica  | @RepublicaNepal

Seasonal vegetables to be cheaper
KATHMANDU, Aug 20: Price of most of the food commodities are expected to increase in the next month as the lean season is about to begin, according to a report.

"However, prices of summer vegetables are likely to decrease in the coming months," a report titled Market Watch states.

The report was jointly produced by World Food Program (WFP) Nepal; Department of Agriculture, Agribusiness Promotion and Marketing Development Directorate under Ministry of Agricultural Development, Federation of Nepalese Chamber of Commerce and Industries/Agro Enterprise Center (FNCCI/AEC), and Consumer's Interest Protection Forum (CIPF).

The preliminary estimates of winter crop production -- wheat and barley -- show an overall decrease of 12 percent compared to last year and a decline of 6.9 percent compared to the five year average, the report said, adding that in June, retail prices of most food commodities monitored in 12 markets across Nepal showed an upward trend due to the start of the lean season of most cereal crops.

Likewise, overall inflation rate in June stood at 11.1 percent, according to the monthly report. "The food and beverage group was similar at 11.9 percent, while various food sub-groups including vegetables (29.4 percent), pulses and legumes (21.5 percent), sugar and sugar products (13.5 percent), meat and fish (12.7 percent) and ghee and oil (12.6 percent) were higher."

The report further adds that retail prices of food commodities monitored across the country showed an upward trend in June. "On a month-on-month basis, retail prices of coarse rice and wheat flour increased by 3.1 percent and 0.8 percent respectively, while that of black gram and broken lentil increased by 4.0 percent and 2.3 percent respectively, it adds.

Likewise, prices of red potato, chicken meat and soybean oil went up by 12 percent, 3.8 percent and 2.9 percent, respectively. Compared to three months earlier, most prices showed an increasing trend with the exception of edible oil. Prices of the most of the agri produces showed an upward trend compared to the same period last year. Overall, the price of most food commodities over the past 12 months showed an upward trend with expected seasonal fluctuations and the effect of the five-month disruption to cross-border trade last year, it adds.

Likewise, prices in regional markets showed somewhat similar trends to the national averages, with an upward trend of prices of coarse rice, wheat flour and broken lentil in all markets with the exception of broken lentil in the major consumer markets of Kathmandu and Pokhara.

"Compared to the same period last year, prices of all commodities showed an upward trend, with the exception of the price of coarse rice in the Tarai markets," it said, adding that wholesale prices regularly monitored by FNCCI/AEC in the five large markets of Birtamod, Kathmandu, Butwal, Surkhet and Dhangadhi showed a marginal decline over the past month. "Wholesale prices monitored in the Kalimati Fruits and Vegetables Market mostly showed high seasonal fluctuations month-on-month."

Prices of tomato, cabbage, christophine and carrot increased by more than 15 percent due to reduction in supply, while that of French bean, smooth gourd, bitter gourd, brinjal, cauliflower, pointed gourd and cucumber decreased by more than 18 percent due to the harvest season.

In June, the overall consumer price index (CPI) released by the Nepal Rastra Bank was 112.4, an increase of 0.9 percent month-on-month. The inflation rate, as measured by the year-on-year increase in the CPI, was 11.1 percent. The food and beverage group of the CPI was 113.1, an increase of 2 percent month-on-month and 11.9 percent year-on-year. Several sub-groups showed higher year-on-year increases: vegetables (29.4 percent), pulses and legumes (21.5 ), sugar and sugar products (13.5 percent), meat and fish (12.7 percent) and ghee and oil (12.6 percent). The non-food and services group of the CPI was 111.9, an increase of 0.01 percent month-on-month and 10.5 percent year-on-year.

"Food supply in some markets in hill and mountain districts has been disrupted due to flooding and landslides caused by monsoon rains," the report adds.

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