WFP Nepal mVAM Market Update # 1 (May/June 2021)

Situation Report
Originally published



Retail prices of most food commodities monitored across 15 major markets showed an upward trend in May 2021. Prices of fruits, potatoes and broken lentils increased sharply. Prices of cereals and soyabean oil were relatively stable, with a marginal increase. Meanwhile, prices of chicken meatand milk declined compared to last month.

Overall, markets continued to function without major disruptions, even in rural areas. Nevertheless, impact of the ongoing COVID-19 pandemic was observed, particularly with essential non-food and food stocks not meeting demand in several provinces, low level of transportation and labour demand. Compared to the start of COVID-19 in 2020, markets functioned better at the beginning of this second wave, in terms of availability and supply, likely due to less strict restrictions, experiences and lessons learnt from the first wave.

3 out of 4 traders reported sufficient availability of food commodities. Inadequate volume of food was reported by traders in Karnali, Sudurpashim and Province 2. Non-food items were relatively more scarce, with 35 percent of traders reporting insufficient volume of non- food items to meet demand. Bagmati, Province 2 and Karnali provinces had the highest proportion of traders with insufficient non-food stock. Current demand for food and non-food commodities was reported medium to high in May 2021.

Supply of goods to markets remained at medium level, while transportation was relatively low. Over 60 percent traders reported that transportation of goods was low in May 2021,whilenearly57percentoftradersobservedmediumlevelofsupply. The May 2021 market monitor showed that most traders observed low demand for labour (56.5 percent), followed by medium level (34.5 percent).

The overall inflation, as measured by the Consumer Price Index (CPI), remained at 3.1 percent year-on-year and 0.69 percentmonth-on-month. The food and beverage CPI was 3.492 percent year-on-year and 1.37 percent month-on-month. The year-on-year inflation of non-food and services was 2.79 percent.

Compared to last year, prices of essential commodities and overall market situation is relatively more stable. Nevertheless, continued restrictions, declining food stocks, coupled with increasing global food prices can potentially lead to negative impact on food access, particularly for poor and vulnerable households, and those who lost income source during the pandemics.