Situation Report on Nepal’s Agrifood Systems May 2024 | Bulletin Number 18

In April 2024, Nepal saw a 1.8 percent increase in the prices of food and beverages compared to the previous month. During the same period, the year-on-year inflation rate for food and beverages reached 5.2 percent, surpassing the overall consumer inflation rate of 4.6 percent. The main contributors to the rise in food prices in April were the annual spikes in the prices of spices (22.6 percent) and vegetables (17.0 percent). Moreover, staple food items such as cereal grains, pulses, and legumes also experienced significant price hikes over the course of the year. Food price inflation was highest in the Terai region (5.6 percent) and lowest in the Mountain districts (3.2 percent).

The year-on-year consumer price inflation in April 2024 fell to 4.6 percent. The highest price inflation was observed for food and beverage prices (5.2 percent) compared to non-food and service categories (4.1 percent). Similarly, the prices of food and beverages were highest in Terai region (5.9 percent), while it was lowest for hilly districts. During this period, basic commodities, such as cereals, pulses, vegetables, spices, and associated products become increasingly less affordable due to rise in their prices. This may affect consumers with lower income. The annual salary index and agricultural labor wage increased by 1.1 and 5.2, respectively, in April 2024, keeping pace with the inflation rate. The trend of annual remittances showed an upward trajectory, with an annual increment of 19.8 percent. Conversely, the number of Nepalese individuals seeking foreign employment declined by 15.1 percent, and the issuance of renewed entry permits decreased by 2.4 percent. These trends suggest a potential shift in the labor market or changes in migration patterns.

Inflation: In April 2024, Nepal witnessed a year-on-year consumer price inflation of 4.6 percent. Notably, food and beverage price inflation reached 5.2 percent, surpassing non-food and service inflation (4.1 percent). Geographically, the highest year-on-year food inflation was in the Terai region (5.6 percent), while the lowest was observed in Mountain districts (3.1 percent) in April. Within the food and beverage category, spices showed the highest year-on-year price inflation at 22.6 percent, followed by vegetables at 17.0 percent. Additionally, staple food products such as cereal grains and their products, pulses, and legumes also experienced significant price increases over one year. However, prices of commodities such as ghee and oil, fruits, meat, and fish declined in April compared to the previous year. The increase in staple food prices, including vegetables and pulses, will require non-agricultural households to allocate a larger portion of their income to food, potentially reducing their spending on other essential goods and services.

Salaries and wages: In April 2024, the year-on-year increase in wage rates was the highest among industrial laborers (10.5 percent), followed by agricultural labor, which saw notable growth of 5.2 percent. Additionally, the year-on-year salary index increased by only 1.1 percent in April 2024. Within the agricultural labor wage rate, the change was more pronounced for female laborers (5.4 percent) compared to their male counterparts (5.1 percent). Although the difference in agricultural labor wages among male and female laborers is small, it is significant, especially if sustained, as it points towards a gradual shift in addressing the long-standing gender-based wage disparity. However, agricultural labor wage rates in April 2024 remained unchanged from the previous month.


Posted on Information Resources, Nepal-news, News - Homepage, June 12, 2024

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