Consumers continue to be battered by rising pricesMarket monitoring to ensure fair prices and quality food items have never been a priority for the government, rights activists say.
Governments change but the plight of consumers battered by ever rising market prices remains the same. The latest episode of price hikes has seen essential food items becoming sharply dearer, unsurprisingly, since the festival season has started.
Consumer rights activists say that intervening in the market to benefit the public has never been a priority for any government, even though the Consumer Act 2018 allows price regulation in 29 essential goods such as food, garments, fuel and paper.
No government has been able to fix prices and implement the law. As a result, the market is wide open to manipulation and opportunist traders take advantage of the situation, especially when demand is at a peak.
Food prices usually swell between mid-June and mid-November under different pretexts as consumption doubles with the many festivals that occur during this period.
Prompted by consumption trends during the festival season and persistent poor governance and political instability, unscrupulous merchants jack up prices of food products as the country is dependent on imports.
"Food has become dearer by 10-15 percent year on year," said Madhav Timalsina, president of the Consumer Rights Investigation Forum. "To stop this annual price jump, the government should ease supply management and formulate a clear strategy that contains provisions for supply management and strict action against dishonest traders," he said
“The Department of Commerce, Supplies and Consumer Protection only inspects the retail market and does not scrutinise the source of the merchandise, due to which prices do not seem to drop,” said Pabitra Bajracharya, president of the Nepal Retailers Association.
He added that unless the goods and their prices are checked with major importers and suppliers, and action is taken against offenders, prices are never going to come down. "It's not retailers who increase prices."
Bajracharya said that the price of sugar has reached Rs90-95 per kg and it is expected to go up to Rs100 per kg because of rising demand during the festival season and the government's failure to import sugar despite a drop in domestic production.
Sugar has become costlier by Rs20 per kg in the past four to five months.
The price of edible oil, one of the most essential items in every kitchen, has increased by more than Rs100 per litre, and is still rising relentlessly. Timalsina said that manufacturers had raised the price of edible oil by 15-25 percent.
According to retailers, mustard oil costs Rs290-300 per litre when this time last year, the price was Rs170-185.
The price of sunflower oil has reached Rs265-270 per litre from Rs165 last year while soybean oil costs Rs250 per litre, up from Rs150-155 a year ago.
The price of rice, which is what most Nepalis eat everyday, has increased by Rs50-200 per bag, depending on the type. Basmati rice now costs Rs2,700 to more than Rs3,000 per 20-kg bag. The price of Jeera Masino rice is Rs1,700-1,800 per 25-kg bag.
Lentils and legumes, which are indispensable accompaniments for boiled rice, have too become dearer by Rs10-15 per kg. Musuro Dal now costs Rs155-165 per kg, Mas Dal Rs140-150, Moong Dal Rs170 and Rahar Dal Rs180.
Transport entrepreneurs are not far behind in raising prices. Bus fares on inter-provincial routes have jumped by a sharp 28 percent. Cargo carriers serving routes in the Tarai and hills have hiked freight charges by 26 and 20 percent respectively.
The hike in bus fares and cargo charges has become burdens on people who have suffered severe income losses due to the months-long lockdown and travel restrictions. Shipping costs are a key component of food prices in countries like Nepal.
According to data from Nepal Rastra Bank, the average consumer price inflation stood at 3.60 percent in 2020-21 compared to 6.15 percent a year ago.
However, Timalsina said that the central bank figures do not reflect the current inflationary trend as prices of all consumer goods have been soaring.
“The festivals are nearing and the government should have started working on demand, supply and price intervention in the market; but the new administration still has not appointed its minister of industry, commerce and supply. So traders are having a field day,” he said.
The average consumer price of ghee and oil, pulses and legumes and transportation sub-groups rose 17.54 percent, 10.65 percent and 6.41 percent respectively on an annual basis, the central bank report shows.
"The government does not have a clear supply policy, market inspection policy and consumer policy due to which traders engage in black marketing and create artificial shortages," he added.
"The Industry Ministry and the Ministry of Agriculture and Livestock Development need to have updated data regarding demand, supply and consumption of daily consumable goods," Timalsina said
A majority of people expect the average prices of goods and services to grow by 10 percent in a year, according to an Inflation Expectation Survey Report released by Nepal’s central bank.
Though consumption declined before the pandemic with educational institutes remaining closed and gatherings being restricted after the pandemic, consumers are focused on spending on food items compared to other goods, and this will rise during the festival season.
When the Department of Commerce, Supplies and Consumer Protection questioned domestic edible oil manufacturers about the rising prices of their products, they pointed to an increase in crude oil prices internationally.
“The inspections conducted by the Commerce Department does not lead to a rise or fall in market prices,” said Shiva Raj Sedai, spokesperson for the department.
He added that the department checks the market for prices, quality and violations of the Consumer Act. “We have been taking action daily against anyone violating the law. We have intensified inspection activities in view of the festive movement in the market,” he said.