Cumin prices have soared threefold in just one year. A year ago, the popular spice variety in Nepali kitchens could be bought for a mere Rs 450 per kg. But today, cumin seeds are commanding prices ranging from Rs 1,300 to Rs 1,400 per kg.
This sharp increase in prices has had a notable impact on sales. “Customers are questioning the abrupt price surge, and we too are left puzzled by the phenomenon. Cumin seed sales have plummeted by 50 percent in recent months,” lamented Shobha Sanjel, owner of Sanjel Spice Shop in Thapathali. “Those who used to purchase a kilogram earlier are now opting for just half a kilogram.”
Cumin isn’t the only spice experiencing a price surge. The price of black pepper has also gone up by Rs 700 per kilogram within a year.
The escalating prices are not limited to spices, as virtually every food and non-food commodity has experienced a surge. Inflation surged to 7.74 percent for the fiscal year 2022/23, exceeding the central bank’s initial target of 7 percent. This is a significant increase compared to the 6.32 percent inflation rate in 2021/22. The primary reasons behind this price surge are the rising global prices and the depreciation of the Nepali rupee against the US dollar. The central bank expects prices to stabilize once domestic demand decreases, as retail prices are dropping in India.
Comparing the fiscal years 2021/22 and 2022/23, prices within the restaurant and hotel sub-group of the food and beverages category surged by 14.42 percent, spices by 12.50 percent, food and food products by 10.70 percent, tobacco products by 9.88 percent, and dairy products and eggs by 9.23 percent. Similarly, within the non-food and services category, prices in the transport sub-group surged by 13.50 percent, entertainment and culture by 10.18 percent, health by 10.01 percent, education by 8.79 percent, and household goods by 8.65 percent.
According to the Nepal Retailers’ Association, the price of cumin seeds has spiked by 150 percent in just one year. Prices of sesame seeds, soybeans, lentils, beaten rice, grams, corn, rice, rice flour, groundnuts, kidney beans, peas, white flour, coriander seeds, ajwain, and ghee have all experienced increases, resulting in an average 22 percent surge in food commodity prices.
Edible oil prices skyrocketed to as much as Rs 340 per liter, representing an almost 80 percent increase. The price, however, has started to fall in recent months.
Vegetable prices have also surged, with some unseasonal and seasonal vegetables experiencing rapid price hikes. Out of the 84 types of vegetables recorded by the Kalimati Fruit and Vegetable Market Development Committee, 70 have witnessed significant price increases, with some surging by as much as 100 percent. Price fluctuations in retail markets have been even more pronounced.
Even seasonal vegetables such as cucumbers, okra, long beans, bitter gourd, radishes, cauliflower, cabbage, onions, capsicum, and tomatoes have seen substantial price increases. For example, brinjal is now retailing at Rs 76 per kilogram, compared to just Rs 12 per kilogram at the same time last year.
Binaya Shrestha, information officer of the committee, attributed the price fluctuations to the rainy season and increased import costs. “Although this happens to be a prime season for vegetable production, supply disruptions caused by heavy rains and landslides have driven prices up. Inclement weather has also led to crop damage in many regions,” he explained. Shrestha does not anticipate significant price decreases before the Dashain-Tihar festive season.
Officials from the Nepal Retailers Association say that ordinary consumers are bearing the brunt of the factors that are causing prices to go up. “As retailers, we can do nothing. When our procurement costs rise; we are compelled to raise prices,” they lamented. “Some unscrupulous traders may have inflated prices for goods already in their inventory.”
Naresh Katuwal, an importer, stated that rising procurement costs are behind the surge in food prices. “The government has increased customs duties on most commodities, and we also have to pay fees to local authorities. Transportation costs have also risen, as have bank rates,” he added.
Since all these expenses are passed on to consumers, they are the ones experiencing the impact. Although the Consumer Protection Act caps profit margins at 20 percent, this regulation is not enforced effectively. Consumer rights activists argue that the government should play a more active role in monitoring and determining traders' procurement and selling costs rather than merely observing from the sidelines.
Madhav Timilsina, President of the Consumer Rights Protection Forum, contends that prices for all kinds of goods have increased. “No matter how much we talk about the governments’ efforts to control black-marketeering, the scope of monitoring and regulation has not expanded. With major festivals approaching, the government should enhance market monitoring and ensure that essential commodities are not in short supply,” he urged. Timilsina also called on the government to take diplomatic initiatives to facilitate the supply of food items subject to export bans in India.
Minister of Industry, Commerce, and Supplies, Ramesh Rijal, asserted that strict monitoring by the department has helped control black-marketeering to some extent. However, he argued that the market prices reflect the reality of supply being outstripped by demand. “During festivals, when demand is high and markets are crowded, businesses may increase prices somewhat. However, the government is actively working to curb black-market practices,” he assured during an interaction with journalists.
