HIGHLIGHTS
In June 2016, retail prices of most food commodities monitored in 12 markets across Nepal showed an upward trend due to the start of the lean season of most cereal crops.
Overall inflation rate in June 2016 was 11.1 percent. The food and beverage group was similar at 11.9 percent, while various food sub-groups were higher: vegetables (29.4 percent), pulses and legumes (21.5 percent), sugar and sugar products (13.5 percent), meat and fish (12.7 percent) and ghee and oil (12.6 percent).
Prices
Retail prices of food commodities monitored across the country showed an upward trend in June 2016. On a monthon-month basis, retail prices of coarse rice and wheat flour increased by 3.1 and 0.8 percent respectively, while that of black gram and broken lentil increased by 4.0 and 2.3 percent respectively. Likewise, prices of red potato, chicken meat and soybean oil went up by 12.0, 3.8 and 2.9 percent respectively.
Compared to three months earlier, most prices showed an increasing trend with the exception of edible oils. Compared to the same period last year, most prices showed an upward trend. Overall, the price of most food commodities over the past 12 months showed an upward trend with expected seasonal fluctuations and the effect of the five-month disruption to cross-border trade last year.
Prices in regional markets showed somewhat similar trends to the national averages, with an upward trend of prices of coarse rice, wheat flour and broken lentil in all markets with the exception of broken lentil in the major consumer markets of Kathmandu and Pokhara. Compared to the same period last year, prices of all commodities showed an upward trend (with the exception of the price of coarse rice in the Terai markets).
Wholesale prices regularly monitored by FNCCI/AEC in the five large markets of Birtamod, Kathmandu, Butwal, Surkhet and Dhangadhi showed a marginal decline over the past one month. Wholesale prices monitored in the Kalimati Fruits and Vegetables Market mostly showed high seasonal fluctuations month-on-month: prices of tomato, cabbage, christophine and carrot increased by more than 15 percent due to a reduction in supply, while that of French bean, smooth gourd, bitter gourd, brinjal, cauliflower, pointed gourd and cucumber decreased by more than 18 percent due to the harvest season.
In June 2016, the overall consumer price index (CPI) released by Nepal Rastra Bank was 112.4, an increase of 0.9 percent month-on-month. The inflation rate, as measured by the year -on-year increase in the CPI, was 11.1 percent. The food and beverage group of the CPI was 113.1, an increase of 2.0 percent month-on-month and 11.9 percent year-on-year; several sub-groups showed higher year-on-year increases: vegetables (29.4 percent), pulses and legumes (21.5 percent), sugar and sugar products (13.5 percent), meat and fish (12.7 percent) and ghee and oil (12.6 percent). The nonfood and services group of the CPI was 111.9, an increase of 0.01 percent month-on-month and 10.5 percent year-onyear.
Supply
The food supply situation in some markets in hill and mountain districts has been disrupted due to flooding and landslides caused by monsoon rains.
Outlook
Most food prices are expected to increase in the next month due to the start of the lean season. However, prices of summer vegetables are likely to decrease in the coming months.
The preliminary estimates of winter crop production (wheat and barley) show an overall decrease of 12 percent compared to last year and a decrease of 6.9 percent compared to the five year average.