Economy

Inflation 11.9%: Commodity prices hit the roof (95% hike)

Published by Octron on June 24, 2009

Inflation continues to rage at 11.9 percent with commodity prices increasing by up to 95 percent in recent months.
Prices of essential goods such as rice, oil, pulses, sugar, maize, vegetables and fruits have soared with a few goods like vegetable ghee, maida and wheat flour becoming cheaper.

According to the essential goods price list of the Department of Commerce, the price of mansuli rice has jumped by 64.49 percent to Rs. 43 per kg from mid-May to mid-June. It was selling for Rs. 26 during the same period last year. Likewise, the price of masino rice soared by 57 percent during the month against Rs. 46 per kg last year.

Pulses — broken lentils, rahar and mash — went up to Rs. 98, Rs. 102 and Rs. 95 from last year’s Rs. 23, Rs. 75 and Rs. 75 respectively. Maize rose to Rs. 67 per kg from Rs. 35 last year, which is an increment of 95.59 percent.

Prices of mutton, chicken and buff have increased by 22, 36.60 and 72.50 percent respectively. These meats used to cost Rs. 380, Rs. 180 and Rs. 100 during the same months last year.

Kailash Kumar Bajimaya, acting director general of the DoC, said that lower production, drought, dependency on imports, electricity shortage, hoarding, curtailing, frequent protests, strikes and blockages in various parts of the country are the major causes that pushed the prices up.

He said that the government was under process to bring Market Competition Act after which the trend of commodities hoarding and curtailing would be monitored strongly and completely discouraged.

Pabitra Bajracharya, president of the Nepal Retailers Association, said that there wasn’t any shortage of commodities in the market. “But still the prices are soaring and there isn’t any control mechanism initiated by the government,” he said.

He said that the government should control the monopoly of the traders. “Prices of commodities controlled by the government have not soared. Only the prices of products which are being supplied by traders have been increasing,” Bajracharya added.

Joint secretary at the Ministry of Commerce and Supplies, Ganesh Dhakal, said that the government was conducting a comparative study regarding the price hike in Nepal compared to India. “Our report will be completed within a month and measures to control price hikes will be taken accordingly,” he said.

He added that the government would set up a Department of Supply Management under the DoC for addressing various issues related with market, consumers, commodities and its smooth supply. “The department is going to be established as per the upcoming budget,” he added. Currently, the government has been distributing sugar, rice and oil at cheaper prices with a view to interfering with the unnatural price hike of these commodities.

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