Rise in food prices trotting out of hand

It's a bitter sweet story. Sugar, oil and ghee, food grains, cereals including rice and rice products - name one item whose price that hasn't touched the sky.
Prices of sugar and sugar-related products as well as oil and ghee sub-groups witnessed a whopping rise in the first two months of the current fiscal year, according to Nepal Rastra Bank (NRB).
"Price indices of sugar and sugar-related products as well as oil and ghee sub-groups rose by a whopping rate of 38.9 per cent and 36.5 per cent, respectively, on a year-on-year (y-o-y) basis in mid-September compared to a negative growth of 18.5 per cent and 11.9 per cent, respectively, a year ago," according to Current Macroeconomic Situation, based on the first two months' data of the fiscal year 2008-09.
Similarly, the sub-group of grains and cereal products witnessed a y-o-y price rise of 23.8 per cent in the review period compared to an increase of 9.8 per cent in the corresponding period of the last fiscal year.
Prices of rice and rice products in this sub-group increased at a whopping rate of 28.4 per cent compared to an increase of 9.8 per cent a year ago. The indices of pulses, restaurant meals, milk and milk products, meat, fish and eggs and spices rose by 23.7, 15.6, 14.6, 14.5 and 13.2 per cent, respectively, in the review period against a rise of 17.8, 4.2, 8.1, 7.8 and 13.2 per cent, respectively, last year.Within the group of non-food and services, the index of transportation and communication, housing goods and services as well as tobacco and related products rose by 23.1, 18.1 and 12.7 per cent respectively in mid-September 2008 compared to a negative growth of 0.5 per cent and rise of 2.5 per cent and 3.2 per cent respectively during the same period, according to the central bank's report.
Region-wise, the price rise in Kathmandu valley was 14.1 per cent followed by 13.5 per cent in the Tarai and 12.7 per cent in the Hills. Last year, the respective rates were 6.3 per cent, 7.5 per cent and 6.8 per cent.
The y-o-y consumer inflation rose to 13.5 per cent in mid-September 2008 from seven per cent in the corresponding period of the previous year.Within the group of domestic manufactured commodities, price index of construction materials and food-related products increased by 24.5 per cent and 21.8 per cent, respectively, in mid-September 2008 compared to a rise of 14.7 per cent and 5.3 per cent, respectivley, a year ago.
In the review period, y-o-y core inflation rose to 12.1 per cent from 5.4 per cent in the corresponding period of the previous year, said the report.