In June 2021, retail prices of food staples remained stable, while prices of vegetables and fruits showed an upward trend. Prices of cabbage, tomato, and orange increased sharply, while prices of soybean oil, chicken meat, broken lentil, and apple increased marginally. In the meantime, prices of cereals, pulses, and milk remained relatively stable. Overall, markets functioned well across most of Nepal in June 2021, with slight improvement in supply and transportation of goods compared to May. Localized scarcity of essential commodities and supply disruptions were observed in Karnali and Sudurpashim provinces. Most traders reported the demand for food and non-food items remained largely at medium level; however, more traders observed high demand for food and non-food items in June 2021.
Supply and transportation of goods to markets showed an improvement and rose to medium and high levels in all provinces, except in Karnali and Sudurpashim. Supply and transportation levels were reported low by majority of traders in Suduprashim and by one third of traders in Karnali. On the other hand, Province 2 showed a reverse trend, where most traders noted high levels of supply and transportation of goods.
In line with the supply and transportation, demand for labour increased in June compared to May 2021. While in May 56 percent of traders found labour demand was low, in June, one third of traders observed medium demand, while 25 percent noted high demand for labour. The start of the paddy and maize planting season, and relatively more construction activities likely contributed to the increased labour demand.
In June 2021, the overall inflation, measured by the Consumer Price Index (CPI), remained at 4.2 percent year-on-year and 0.43 percent month-on- month. The CPI of food and beverage was 6.22 percent year-on-year and 0.88 percent month-on-month. The year-on-year inflation for non-food and services was 2.6 percent.
The overall price trend and market situation showed an improvement in the functioning of markets in June 2021. Relative easing of the COVID-19 lockdown, resulting in longer opening hours for markets and reviving of some economic activities, likely contributed to this improvement. However, uncertainty prevails, and the overall trend is dependent on how the COVID-19 situation evolves. Any further shocks could be detrimental for poor and vulnerable households, whose capacity to cope with prolonged crisis and shocks has been already stretched. Ensuring smooth market operations, availability and supply of goods is critical for prices stability, and in turn for food access.