Nepal Market Watch: No. 85, January 2017 [EN/NE]
In January 2017, retail prices of most food commodities monitored in 12 markets across Nepal were stable (or declined) due to the improved supply of food from the summer crop harvest and stable transportation services.
Overall inflation rate in January 2017 was 3.2 percent. The food and beverage group was at -0.7 percent. Several food sub-groups were higher: sugar and sugar products (15.0 percent), spices (5.8 percent) and milk and milk products (2.9 percent).
Retail prices of most food commodities in 12 markets across Nepal were stable or declining in January 2017 (see Fig. 1):
On a month-on-month basis, retail prices of coarse rice and wheat flour were stable. The retail price of black gram decreased by 5.2 percent, while that of broken lentil increased by 2.6 percent. Prices of red potato and chicken meat decreased by 0.2 and 2.6 percent respectively. The price of soybean oil decreased by 1.4 percent.
Compared to three months earlier, most prices showed a declining trend (with the exception of broken lentil). The largest change was red potato (-20.4 percent).
On a year-on-year basis, most prices showed a declining trend (with the exception of chicken meat). The largest change was soybean oil (-20.7 percent).
Factors behind current price trends include seasonal fluctuations associated with post-harvest period, stable transportation services and regular supply of food in deficit areas.
Retail prices in regional markets (see Fig. 2) showed somewhat similar trends to the national averages, with an increase in the price of coarse rice, wheat flour and broken lentil in most markets (with the exception of the declining trend in the prices of coarse rice and wheat flour in the Terai markets).
Compared to the same period last year, prices of most food commodities showed a decreasing trend with the exception of the price of coarse rice in the major consumer markets of Kathmandu and Pokhara, and the Terai markets.
Wholesale prices regularly monitored by FNCCI/AEC in the five large markets of Birtamod, Kathmandu, Butwal, Surkhet and Dhangadhi remained stable month-on-month. Wholesale prices monitored in the Kalimati Fruits and Vegetables Market showed high seasonal fluctuations month-on-month (see Table 1): prices of christophine, bitter gourd, okra, broad leaf mustard and brinjal increased by more than 15 percent due to a reduction in supply, while that of cabbage, French bean, green peas, cucumber and carrot decreased by more than 10 percent due to the harvest season.
In January 2017, the overall consumer price index (CPI) released by Nepal Rastra Bank was 113.9, a decrease of 1.0 percent month-on-month. The inflation rate, as measured by the year-on-year increase in the CPI, was 3.2 percent. The food and beverage group of the CPI was 111.5, a decrease of 2.6 percent month-on-month and 0.7 percent year-on-year;
Several sub-groups showed higher year-on-year increases: sugar and sugar products (15.0 percent), spices (5.8 percent) and milk and milk products (2.9 percent). The non-food and services group of the CPI was 115.9, an increase of 0.2 percent month-on-month and 6.2 percent year-on-year.