Economists and traders say that disruptions in the supply chain of Dashain-targeted goods and persistent inflation are likely to dampen festive market activities this year.

Economic activity in Nepal typically sees a significant uptick in September and October, with major festivals like Dashain and Tihar celebrated across communities. An estimated 40 to 70 percent of annual market activity takes place during Dashain, Tihar, and Chhath, according to economists.

However, this year, consumers remain hesitant to spend due to continued high inflation.
“The consumer sentiment is still low as inflation remains elevated, particularly in essential goods,” said economist Jagadish Chandra Pokharel.

According to the central bank, the year-on-year consumer price inflation stood at 2.72 percent in mid-June 2025, down from 4.17 percent a year earlier. Food and beverage inflation was recorded at just 0.54 percent, while non-food and services inflation was at 3.94 percent during the same period.

Despite this, market prices have yet to stabilise in the aftermath of the Covid pandemic.
“Prices of frequently consumed goods like readymade garments and food items remain high, discouraging consumer spending,” Pokharel added.

He emphasised that festive market activity generally improves when middle-income consumers have both the purchasing power and access to goods. “But we don’t see any signs of that yet.”

Still, there is some hope. With remittance inflows continuing to rise, consumer spending could improve during the festive season, Pokharel said. “Remittance remains the primary source of spending. Although it's not clear how consumers will behave this year, the ongoing recovery and a more flexible monetary policy might help stimulate the market.”

Meanwhile, the supply of goods from the northern border has been significantly disrupted. The Kerung border remains closed after flash floods on July 8 swept away the Miteri bridge on the Kerung-Rasuwagadhi trade route. The alternative routes are dangerous due to ongoing monsoon-triggered landslides and floods.

Traders report that Dashain-targeted goods have not yet reached the market.

“If supply continues to be interrupted, it will inevitably fuel festive inflation,” said Pokharel.

Importers said they are making every effort to retrieve stranded goods meant for the festive season. After a 12-day closure, the Tatopani border point reopened on Thursday. But with continued rainfall, traders remain concerned about further disruptions.

“For now, around 30 trucks carrying Nepali goods are arriving daily via Tatopani. We aim to increase this to 50–100 trucks a day by operating in two shifts,” said a trader. Most of these trucks are carrying readymade garments, consumer electronics, fruits, and other Dashain essentials.

Roughly 400 Chinese containers are currently stranded at the Kerung border. If the Tatopani route remains functional, these goods may be redirected via Khasa, potentially easing the backlog.

“If the pace of imports continues, there will be no shortage of new goods in the Dashain market,” said traders. “But if roads get blocked again due to rain, we may need to transport goods manually, which will make them more expensive.”

Prices of essential food items are already trending upward, according to food retailers.

“The price of edible oil has gone up by Rs10 per litre over the past two months, reaching Rs250 per litre,” said Pabitra Bajracharya, president of the Nepal Retailers Association. “We’ve also heard that prices of edible oil and sugar may rise further due to festive demand.”

Sugar is currently being sold at Rs110 per kg in retail. While rice prices have remained stable, lentils and legumes are expected to become more expensive in the coming weeks.

Consumers often face sugar shortages during the festive season—sometimes even after queuing for hours and paying premium prices. Traders warn the same situation may occur this year.

Steam Jeera Masino rice is currently priced between Rs85 and Rs95 per kg depending on the brand. Masur lentils cost Rs150 to Rs170 per kg, black chickpeas Rs150 per kg, and jeera Rs540 per kg.

“Sales of food items are already lower than in previous years, and further price hikes will hurt sales,” Bajracharya said. Retailers argue that food supply is stable and there is no justification for rising prices.

In addition to food, vegetable prices have already surged.

According to the Kalimati Fruits and Vegetable Market Development Board, vegetable prices have risen as much as 233.33 percent in the past month. Traders attribute this to increased demand ahead of Teej while supply remains relatively unchanged.