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Nepal Market Watch: No. 90, February 2019 [EN/NE]

Countries
Nepal
Sources
Govt. Nepal
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HIGHLIGHTS

  • In February 2019, retail prices of most food commodities monitored in 15 major markets across Nepal showed a downward trend or held relatively stable, due to sufficient availability of food commodities from domestic production and improved commodity supply in rural markets.

  • The overall inflation rate in February 2019 was 4.4 percent. The food and beverage group was stable at 2.5 percent, although several food sub-groups were relatively higher: ghee and oils (8%), milk and milk products (7.7%), and meat and fish (6.8%).

Prices

Retail prices of most food commodities monitored in 15 major markets across Nepal showed a downward trend in February 2019, (see Fig. 1):

  • On a month-on-month basis, retail prices of coarse rice, broken lentil, black gram and red potato decreased by 2.4, 5.3, 1.7 and 11.6 percent respectively, while that of edible oils was relatively stable. The retail price of wheat flour and chicken meat increased by 5.8 and 3.7 percent respectively.

  • Compared to three months earlier, most prices showed a downward trend with the exception of an upward trend in the price of wheat flour and chicken meat. The largest change was red potato (-33 percent).

  • On a year-on-year basis, most prices showed a decreasing trend (with the exception of coarse rice and wheat flour). The largest change was broken lentil (-14 percent).

Factors behind current price trends include the regular supply of food and non-food commodities associated with stable transportation services and seasonal fluctuations.

Retail prices in regional markets (see Fig. 2) mostly showed a similar trend as in the national averages. Compared to last month, the prices of monitored food commodities showed a decreasing trend in all markets with the exception of an upward trend of the price of wheat flour in all markets.

Compared to the same period last year, prices of most food commodities showed a declining trend with the exception of a stable situation in the mountain and hill markets.

Wholesale prices monitored in the Kalimati Fruits and Vegetables Market showed relatively high month-on-month fluctuations (see Table 1): prices of bitter gourd and cabbage increased by more than 5 percent, while that of spinach, cauliflower, broad mustard leaf, christophine,
French bean and dry onion decreased by more than 15 percent due to a surge in supply from the harvest season.

The overall consumer price index (CPI) released by Nepal Rastra Bank was 124.2 in February 2019, an increase of 0.2 percent month-on-month. The inflation rate, as measured by the year-on-year increase in the CPI, was 4.4 percent. The food and beverage group of the CPI was 116.9, a decrease of 0.2 percent month-on-month and an increase of 2.5 percent year-on-year; several sub-groups showed relatively high year-on-year increases: ghee and oils (8%), milk and milk products (7.7%), and meat and fish (6.8%). The non-food and services group of the CPI was 130.3, an increase of 0.6 percent month-on-month and 5.8 percent year-on-year.

Supply

The overall supply of food and non-food commodities is so far good and stable across the country due to sufficient availability from domestic production and imports, and stable transportation services.

Outlook

Most food prices are expected to remain stable in the next two months due to regular supplies of food commodities with stable transportation services even in the markets connected with fair weather roads.

The outlook for the harvest of winter crops, mainly wheat is expected to be better than last year due to favourable weather. This will help to increase wheat production in the country.