ReliefWeb

HIGHLIGHTS

• In April 2019, retail prices of most food commodities monitored in 15 major markets across Nepal showed a marginal increase or held relatively stable, due to sufficient availability of food products in rural markets.

• The overall inflation rate in April 2019 was 4.4 percent. The food and beverage group was stable at 2.4 percent, although several sub-groups were relatively higher: ghee and oils (8.5%), spices (8.5%), and cereal grains and their products (6.0%).

Prices

Retail prices of most food commodities monitored in 15 major markets across Nepal showed a marginal increase in April 2019 (see Fig. 1):

• On a month-on-month basis, retail prices of coarse rice, wheat flour, black gram and soybean oil increased by 1.8, 2.3, 2.4 and 2.0 percent respectively, while that of broken lentil remained relatively stable. The retail price of red potatoes decreased by 1.2 percent.

• Compared to three months earlier, most prices showed a downward trend with the exception of the price of wheat flour and soybean oil (which went up). The largest change was in red potato (-11.6 percent).

• On a year-on-year basis, most prices showed a decreasing trend (with the exception of wheat flour and soybean oil). The largest change was black gram (-15 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 different trend as compared to the national averages.

Compared to last month, the prices of food commodities mostly showed an increasing trend in all markets with the exception of a decreasing trend of the price of broken lentil in the mountain and hill markets. Similarly, the price of wheat flour indicated an increasing trend, while that of broken lentil showed a declining trend in all markets. The price of coarse rice showed an increasing trend in the major consumer markets of Kathmandu, Pokhara and Surkhet, while in the Terai, and mountain & hill markets, the price of coarse rice indicated a declining trend.

Wholesale prices monitored in the Kalimati Fruits and Vegetables Market showed relatively high month-on-month fluctuations (see Table 1): prices of tomato, carrot, pumpkins, cabbage, cauliflower, French bean, radish, brinjal, cucumber and christophine increased by more than 35 percent due to reduction in supply as compared to demand, while that of bitter gourd, pointed gourd, okra and cow pea decreased by more than 5 percent due to a surge in supply from the harvest season.

The overall consumer price index (CPI) released by Nepal Rastra Bank was 124.8 in April 2019, an increase of 0.6 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 118.2, an increase of 1.4 percent month-on-month and 2.4 percent year-on-year; several sub-groups showed relatively high year-on-year increases: ghee and oils (8.5%), spices (8.5%), and cereal grains and their products (6.0%). The non-food and services group of the CPI was 130.2, a decrease of 0.02 percent month-on-month and an increase of 5.7 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 regular imports, and stable transportation services.

Outlook

Most food prices are expected to increase in the next two months with the start of lean season of most food commodities. The outlook for the harvest of winter crops, mainly wheat is estimated to increase compared to last year due to favourable weather during growing and maturity period.