Sunday, July 8, 2012

Food prices become dearer

Disruptions in supply and increased fuel prices once again fuelled the price rise of food items in June after going through a moderation in the past few months.
The series of strikes nationwide due to the conflict regarding the structure of a new federal Nepal brought about a large scale disruption in supply in April and May hitting food prices hard. Likewise, Nepal Oil Cooperation's move of increasing diesel price by Rs four to Rs 93 per litre will affect transportation cost which will in turn put more pressure on prices.
"Such a continuous increase in fuel prices is a major concern for food security due to its likely contribution to the rise in transportation costs, thereby raising food prices," according to a joint report published by UN World Food Programme (WFP), Ministry of Agriculture Development (MoAD), Federation of Nepalese Chambers of Commerce and Industries, and Consumer Interest Protection Forum.
Increasing food prices have also started pushing the overall inflation up since the last couple of months. The index of food and beverages group increased by 7.1 per cent during the first 10 months of the current fiscal year, according to the macroeconomic report published by Nepal Rastra Bank which a month back was a mere 4.6 per cent.
Moderated food inflation was attributed for the general price level staying close to the target level of seven per cent but with the increasing food prices, national inflation might also see an upward trend once again, pointed out vice president of Consumer Rights Protection Forum Ramesh Chandra Poudel.
Moreover, a delay in the monsoons combined with insufficient fertilisers has affected timely plantation of paddy across the country and the growing maize mainly in the hilly belt, indicating a negative outlook for the summer crop production as compared to last year.
The index of non-food and services group increased by 10.1 per cent during the review period that stood at 4.2 per cent last year. In the retail markets regularly monitored by MoAD and WFP, most prices showed a slightly upward trend over the past one month, says the report. The national average price of coarse rice went up by 1.9 per cent in a kilo.
Likewise, prices of soybean oil and red potato climbed up by 1.4 per cent and 1.7 per cent in the review period. In the review period, the price index of vegetables went up by 27.8 per cent due to supply problems while it had increased by 48.3 per cent during the same period last year.                        

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