The country with the similar market is India, and the control candidates are Biratnagar, Birgunj, Bhairahawa, Nepalgunj, and Dhangadhi.The aim of the study is to identify ways to bolster government´s market interventions, say government officials.
The study follows on the heels of the consumer groups´ increasingly airing grievances that the prices of essential commodities have risen far too sharply in Nepal when compared to the prices in India, the country that Nepal turns to, to fulfill most of its essential commodities requirements.
Consumer organizations blame the private sector´s playing foul for the higher prices of edible oil and other essential commodities here. Their claim may be bolstered by the fact that the prices of essential commodities have been increasing in Nepal at a time when they have been dropping in the international markets.
During the study, the task force, headed by the acting director general of the Department of Commerce (DoC), will concentrate on 15 essential commodities, such as rice, maize, pulses, edible oils, fruits and vegetables, among others.
It will study their price movements and identify the causes for price increases in Biratnagar, Birgunj, Bhairahawa, Nepalgunj and Dhangadi, says Khila Nath Bastakoti, the director at the department.
Although the study will focus on these bordering cities, the Supplies Ministry has also assigned the task force to ascertain internal factors that could have led to higher prices of essential goods in the Kathmandu Valley.
According to the statistics of Nepal Rastra Bank, the prices of food items have soared by an average of 17 percent over the last one year: the prices of rice and pulses have grown by over 15 and 20 percent, respectively, and the prices of vegetables and fruits have also gone up by 22 and 19 percent, respectively, over the same period. The price of sugar too has more than doubled over the year.
But contrary to the situation in Nepal, the prices of those commodities in India have grown only marginally. The government hopes that studying the reasons for that incongruity will help Nepal.
"This difference could have arisen due to any number of factors, like the duty structure, short supply and other constraints, or due to the cartels in our country--as consumer organizations claim," says a DoC official. "We will dissect the reasons for the emergence of such a situation in our country, and make the appropriate recommendations."
The consumer organizations are fingering the cartels because except for petroleum products and salt, all other essential and non-essential commodities in Nepal are supplied through the private sector. The government does take steps to check undue price rises by supplying sugar, rice and flour at lower prices, but the quantity of such supplies remains too meager to make an impact on the market.
For instance, the government is presently supplying sugar at Rs 51.50 per kg, but its price in the market has gone up to reach Rs 60. "This indicates that there is a serious flaw with our market intervention capacity. Through the findings of this study, we hope to correct this situation," says the Supplies Ministry official. The task force will submit its report in a month.
Related story
Huge price difference in health equipment purchased by Army and...
