Food price hike hits sky

The price of black-gram is up by 44 per cent, wheat flour by 25 per cent, musuro (broken lentil) by 25 per cent and coarse rice by 14 per cent compared to 12 months ago, according to a report that points out national food price inflation as a serious concern.
"Thus it is likely that official year-on-year CPI inflation figures released by the Nepal Rastra Bank could rise again next month," the report predicts. Common cooking oils are the only commodities which have not significantly increased during the past 12 months. The recent harvest of potato has resulted in a significant decrease in potato prices; which are down by around 17 per cent across the country compared to December.
The most recent year-on-year food price inflation figure provided by the Nepal Rastra Bank (NRB) in January was 17.8 per cent -- up by almost two per cent compared to last month, said a report jointly produced by World Food Programme (WFP) - Food Security Monitoring and Analysis Unit, Ministry of Agriculture and Cooperatives - Department of Agriculture, Agribusiness Promotion and Marketing Development Directorate (ABPMDD), Federation of Nepalese Chambers and Commerce and Industry/Agricultural Enterprise Centre and Consumer Interest Protection Forum.
High food prices are driving overall high consumer price inflation, which is currently estimated at 11.3 per cent, the report said.
Over the past month the price of staple grains have remained relatively stable due to the summer crop harvest. However, as the harvest was weak it did not have a major impact on reducing the price of key commodities in most markets (as would normally be expected. "A recent bird flue outbreak in the Pokhara region could have a major impact on poultry trade and prices during the first half of 2010. Previous outbreaks have seriously impaired poultry markets in Nepal," it added.
The price of staple food items generally remained stable across the country. In the markets regularly monitored by WFP and MoAC the average price of coarse rice in December was Rs 32 per kilo (down by three per cent compared to last month) and the national average wheat price was Rs 35 per kilo (up by one per cent compared to last month).
Grain prices are relatively stable due to the recent summer harvest which has helped re-stock local markets. However, the summer harvest was too weak to significantly reduce prices as would normally be expected.
However, the national average price of potato is still Rs 15 per kg higher than last year. An outbreak of bird flu has occurred in Pokhara. A Rapid Response Team (RRT) has been deployed for close surveillance. It has been reported that 10,000 chickens, ducks and other birds in the area could be culled to prevent the spread of the disease. MoAC is also considering to ban transportation of poultry products to and from the affected area. Bird flu that broke out in Eastern Terai earlier caused a steep increase in chicken prices to Rs 280 per kg in Kathmandu. Though the cardamon production in the Eastern districts of Taplejung, Sankhuwasabha etc is reportely down by 30-40 per cent compared to last year, these districts have benefited from increase in its price from about Rs 175 per kg last year to about Rs 400-450 per kg this year.
The price of cooking gas has increased from Rs 1,125 to Rs 1,250 per cylinder, particularly affecting urban households. The price of salt was also increased from Rs 11 to Rs 15 per kg.Generally, supply improved across Nepal during January, the report said. The Karnali highway opened and this improved both supply and prices in feeder markets. The most noticeable improvement was in Jumla where the prices of coarse rice is down by 23 per cent compared to last month.
The recent summer harvest has also increased supply in various markets.