The festival season gets underway with high prices, low footfall and weak price monitoringThe government lacks adequate competent personnel to conduct regular market inspection, say officials.
Jiwan Thapa Magar, a retailer in Khare, Dakshinkali Municipality, had brought two sacks of mixed beans expecting good festival sales during Janai Purnima, but he barely sold one. In previous years, he used to sell four-five sacks of the beans which are used to make a special soup consumed during the festival.
“Sales are worse than after the great earthquake of April, 2015. I had hoped that with the easing of lockdown restrictions and the onset of the festive season, food items would sell well,” he said.
Magar even used to hire a few shop assistants to help him handle the festival rush, but he thinks that they will not be needed this year.
With the beginning of the festival season, demand for food items like rice, lentils and legumes, edible oil, spice and flour start rising, but this year there are fewer buyers because of Covid-19, said traders.
Raj Kumar Shrestha, president of the Nepal Retailers Association, said festive sales were down by 50 percent year-on-year mainly because fewer people were visiting the bazaars.
Shrestha, who has been involved in the retail business since 1974, said sales of food items used to peak with the approach of the Teej festival with commercial organisations and various groups organising Teej parties. As the government has disallowed gatherings of more than 25 people, Teej programmes are not taking place like in previous years, he said.
Since people's purchasing power has been slashed due to lay offs and lost incomes, the hike in food prices will be painful, especially during this festive season.
Prices tend to increase during the holidays with a spike in demand because traders engage in price gouging knowing that people will buy what they need regardless of the cost.
“Consumers do not care about a slight increase in prices, and so traders are likely to add a few rupees to the cost,” he said. “Importers and wholesalers are the ones responsible for making things dearer. Consumers ultimately suffer.”
Prices usually swell during the period mid-June to mid-November every year under different pretexts.
The number of big traders and importers in Nepal is small, therefore they can control supply during the festival season. But after the season ends, prices return to normal, he said.
The government does not have enough data about supply and demand to be able to control prices, according to Madhav Timilsina, president of the Consumer Rights Investigation Forum.
“Therefore, it is difficult for the government to fix market prices,” Timilsina said. “As a result, prices of essential food grain have been increasing every year.”
The Consumer Act 2018 allows price regulation for 29 essential consumer goods such as food items, garments, fuel and paper. “But the government has not been able to fix prices and implement the act,” said Timilsina.
In 2018, the government formed a committee after seasonal vegetable prices shot up due to the involvement of middlemen. The committee report recommended making purchase bills mandatory to ensure transparency in the purchase rate (price paid to farmers) and reduce the involvement of middlemen in the supply chain.
The government failed to implement the recommendations, giving continuity to the existing system and allowing middlemen to thrive.
The Department of Commerce, Supply and Consumer Protection stated in its plans and programmes for the current fiscal year that the market level, list of essential services and standards for price determination would be implemented in the current fiscal year.
The government does not have the wherewithal to conduct regular market inspection of different sectors to control prices. “We do not have expert manpower with knowledge about food items, groceries, water and medicine,” said Sagar Mishra, director at the department.
The department has written to 753 local units to check market prices, but they do not have the personnel either.
According to the Consumer Protection Act 2018, local bodies carry out inspection at the local level to check the supply system, price, quality and purity of goods and services. But different consumer rights institutions like the National Consumer Forum and Consumer Rights Investigation Forum claim that local governments have not been fulfilling their duties as per the act.
An official at Kirtipur Municipality said that the municipality was not able to conduct market inspection regularly and effectively for lack of expert manpower on market and food items. The inspection team is not able to reach every corner of the municipality, he said.
“It visits several shops, gives them a few suggestions and returns to the office without taking any action,” he said, requesting anonymity as he was not authorised to speak to the media.
State-owned Food Management and Trading Company said that it would be selling food items at pre-lockdown prices. Deputy General Manager Shri Maniraj Khanal said that retail prices for consumers would not be affected even though its cost price had swelled.
“The price of food items has not been changed, and it will not change during festival time,” he said. He added that prices may be adjusted after the holiday season.
The company has 13,000 tonnes of food items in stock, including rice, lentils and legumes. It will be importing 10,000 tonnes of rice which is expected to arrive in mid-August. According to Khanal, 10,000 tonnes of sugar on order will arrive by mid-October.
The company will be importing 25,000 tonnes of rice this fiscal year and plans to supply 1,600 goats and 1,400 mountain goats for Dashain. The company will be supplying 250 tonnes of lentils and 220 tonnes of beans and soybean for the fiscal year, said Khanal.
The government company does not have adequate inventory and does not maintain retail outlets everywhere, as a result of which consumers have to pay the prices set by importers, wholesalers and retailers.
“I am worried about managing my expenses as the festival season is nearing and prices of almost everything are doubling in the market, and I have not sent a penny to my family,” said Baburam Karki.
The 34-year-old from Sindhupalchok district used to work at a men’s clothing store on New Road and was laid off recently. He has been looking for another job, but that is difficult amid the pandemic.