Retail prices of food staples monitored in 15 major markets across the country remained relatively stable compared to June 2020, however an increase was observed for prices of meat and dairy products. Prices of fruit and vegetables increased sharply. Prices of most food commodities remained relatively higher in Karnali and Sudurpaschim provinces, compared to other provinces.
Overall, functioning of markets continued to improve, however more traders reported an inadequate quantity of goods in the surveyed markets in July, compared to June 2020.
More than 75 percent of traders reported medium demand levels for foods and non-food items, while sufficient volume of commodities was reported by around 57 percentof traders. 75 percent of the 118 interviewed traders from 67 districts reported a medium supply of commodities to markets and transportation similarly was reported at a medium level by 59 percent of traders. Meanwhile, 28percentoftradersconsidered transportationlevelshigh.
Similar to the functioning of markets, labour demand improved slightly, with 79 percent of traders reporting medium levels of labour demand in July, compared 74 percentin June2020.
The overall inflation published by Nepal Rastra Bank in July 2020 showed a 4.78 percent year-on-year and 0.9 percent month-on-month increase, while the food and beverage group of CPI increased by 5.7 percent year-on-year and 1.7 percent month-on-month. The non-food and services of the CPI increased by 4.04 percent year-on-yearand 0.2percentmonth-on-month.
The agricultural lean season and monsoon-induced supply restrictions combined with the COVID-19 related movement restrictions likely contributed to the overall price increase and reported insufficiency of commodities in markets in parts ofthe country.
The Government of Nepal has taken measures to facilitate the supply of essential goods to markets. The summer paddy planting has been nearly completed, reaching around 98 percent of total cultivated land. However, the supply of chemical fertilizers is inadequate in many parts of the country due to import restrictions caused by the COVID-19 situation, potentially affecting the overall food productionin the country.