Price hike a potato too hot for the common people to handle

KATHMANDU:Potato has become dearer by 50 per cent in just one year.

Over the past one year, the price of potato has increased by 50 per cent, musuro by 30 per cent, black gram by 21 per cent, rice by three per cent and wheat flour by six per cent. The price of cooking oil has, however, reduced — by around 15 per cent.

“The prices of staple food items in Nepal have continued to increase steadily,” according to the monthly report jointly published by World Food Programme (WFP) — Food Security Monitoring and Analysis Unit, Ministry of Agriculture and Cooperatives — Department of Agriculture, Agribusiness Promotion and Marketing Development Directorate, Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and Consumer Interest Protection Forum.

Even now, the price hike has not cooled. It has continued to grow in comparison to a year ago — at the peak of the international food crisis.

The price of food this Dasain holiday was much higher compared to last Dashain. “The price of chicken was on an average 40 per cent higher than last year. Mutton also was more expensive, and the price of key vegetables such as cauliflower, potato and onion were typically more than 50 per cent higher than last year. Sugar was up by over 45 per cent,” said the report.

However, the price of musuro decreased by around 2.5 per cent in September as a result of Nepal’s lentils export ban. The export ban reduced demand pressure within Nepal as the bulk of lentils produced is normally exported. However, producers have been complaining that decreased income from lentils sales may force them to reduce future levels of production.

The price of coarse rice is expected to further increase across the region during the coming months due to large scale local and regional crop losses, according to the report. It is anticipated that post harvest prices will remain high and then significantly increase during the first half of 2010.

The government has indicated the need to import 400,000 tonnes of grain to meet the deficit caused by winter drought and late monsoon. However, reduced regional stocks are likely to significantly increase the cost of grain imports. The Indian border states of Bihar and Uttar Pradesh have been declared drought-induced disaster areas by the Indian government, making Nepal more vulnerable.

Late monsoon rain has led to flashfloods and landslides in districts of Western Nepal, causing localised crop damage and blocking parts of Karnali Highway and other trails further hindering food supply to many western hill and mountain districts.

Various mountain and hill markets have insufficient stock as a result of poor winter production and disruptions in commodity movement because of the monsoon. “Markets in Dolakha, Sindhupalchowk, Dailekh and Jajarkot are particularly affected,” said the report.

Poor household winter crop production has both increased demand for purchased product and reduced local supply to markets. This has lead to price increases and insufficient supply.