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Nepal: Nepal Market Watch: No. 94, October 2019 [EN/NE]

Source: Government of Nepal, World Food Programme Country: Nepal
HIGHLIGHTS In October 2019, retail prices of most food commodities monitored in 15 major markets across Nepal showed a downward trend or remained relatively stable, due to sufficient availability of food commodities from domestic production and improved supply in rural markets with unpaved roads. The overall inflation rate in October 2019 was 6.2 percent. The food and beverage group was stable at 7.04 percent, although several food sub-groups were relatively higher: vegetables (16.8%), spices (13.2%), fruits (11.6%), and meat fish (8.3%). Prices Retail prices of most food commodities monitored in 15 major markets across Nepal in October 2019 were relatively stable (see Fig. 1): On a month-on-month basis, retail prices of coarse rice and red potato increased by 1.4 and 22 percent respectively, while those of black gram, broken lentil, soybean oil, wheat flour and chicken meat decreased by 1.1, 3.1, 1.2, 1.2 and 1.5 percent respectively. Compared to three months earlier, most prices indicated a declining trend with the exception of an upward trend of potato, coarse rice and wheat flour. The largest change was red potato at +29.93 percent. On a year-on-year basis, most prices showed an increasing trend (with the exception of broken lentil and coarse rice). The largest change was red potato at +14.8 percent. Factors behind relatively stable price trends include smooth supply with stable transportation services and partially seasonal fluctuations. Retail prices in regional markets (see Fig. 2) mostly showed a trend similar to national averages. Compared to last month, the price of food commodities mostly showed decreased in all markets with the exception of an upward trend of coarse rice in the Terai and hill mountain markets. Compared to the same period last year, prices indicated a mixed trend with an increasing trend of the price of broken lentil in Terai markets and wheat flour in all markets and decreasing trend of the price of coarse rice in all markets and broken lentil in the major consumer markets and 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 carrot, tomato, okra and pointed gourd increased by more than 7 percent due to a reduction in supply relative to demand, while smooth gourd, broad leaf mustard, spinach, christophine, brinjal and French bean prices decreased by more than 14 percent due to a surge in supply from the harvest season. The overall consumer price index (CPI) released by Nepal Rastra Bank was 132.7 in October 2019, an increase of 0.7 percent month-on-month. The inflation rate, as measured by the year-on-year increase in the CPI, was 6.2 percent. The food and beverage group of the CPI was 130.3, an increase of 1.6 percent month-on-month and 7.04 percent year-on- several sub-groups showed relatively high year-on-year increases: vegetables (16.8%), spices (13.2%), fruits (11.6%), and meat and fish (8.3%). The non-food and services group of the CPI was 134.4, a decrease of 0.03 percent month-on-month and an increase of 5.6 percent year-on-year. Supply The overall supply of food and non-food commodities has improved in rural and remote markets connecting to unpaved roads with the start of winter season. Moreover, major markets are functioning well with smooth transportation services. Outlook Most food prices are expected to remain stable or decrease over the next two months, with improved supply mainly from the recently harvested summer crops. Early estimation of rice production, one of Nepal’s major crops, is likely to fall by 7-8 percent compared to last year, due to this year’s delay and insufficient rains as well as the influence of armyworms during the harvesting period.


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