Nepalese are facing the double whammy of soaring market prices and a devastating pandemic, consumer rights activists have said.
The price of essentials like edible oil has nearly doubled in recent weeks, even as people have to settle for reduced incomes as the coronavirus has destroyed jobs and businesses, consumer rights activists have said.
Sunflower, soybean and mustard oils have become more expensive as unscrupulous traders try to take advantage of political instability and a society living in dire straits with the rampaging pandemic, according to insiders.
The price of sunflower oil rose to Rs300 per liter of Rs235 in a matter of days, while soybean oil now costs Rs250, from Rs210.
The price of mustard oil rose to Rs350 per liter from Rs200 after the lockdown was announced, retailers said.
“Prices rose sharply after the government announced early elections and shut down markets completely by imposing a tighter lockdown,” said Madhav Timilsina, chairman of the Consumer Rights Investigation Forum.
“Domestic traders are raising prices abnormally under the pretext of rising commodity prices,” he said.
“As the month-long lockdown has reduced income, the price of basic essential food items doubles,” said Radha Basnet of Kupondol, painfully paying Rs290 for a liter bottle of sunflower oil.
“Cooking is impossible without edible oil. It is absolutely necessary. But government activity in the market to control the prices of essential food products is nil, ”she said.
According to the Nepal Rastra Bank, the price of ghee and oil in mid-April was 21.38% higher year over year.
Former Commerce Secretary Purushottam Ojha said that three factors mainly drive an increase in the price of edible oil: an increase in the price of raw materials at the source, an increase in tariffs by the government and unfair trade practices.
“The price of edible oil has increased by more than 30 percent, which is too high,” Ojha told the Post. “Edible oil is a staple food item, and the government should regulate its distribution,” he said.
The Ministry of Commerce, Supply and Consumer Protection should do a market analysis of the rising prices and inform the people, he said. “The government should take responsibility for controlling prices and regulating the food market by collecting and analyzing inventory data for edible oils, both crude and refined.
Traders who take advantage of the zero tariff have exported more than 90 percent of the refined edible oil produced in Nepal to India in the past 10 months, Ojha said. Edible oil shipments account for 35 percent of the country’s total exports, but this has no contribution to the national economy, he added.
“If the excess exports are the reason for the sharp rise in prices, then they must be brought under control so that the price does not increase exorbitantly,” Ojha said.
“The government should be ready for swift action instead of issuing directives. Tariffs and duties can be reduced to relieve consumers in times of crisis or export quotas can be imposed to ensure sufficient supplies on the market. internal market, ”he said.
Despite adequate imports of raw soybean and sunflower oils, consumers pay high prices to cook their vegetables.
The rise in the price of crude oil on the international market is considered to be one of the factors behind the soaring prices of edible oil. India is also facing the highest level of edible oil price hikes in more than a decade.
Figures released by the Customs Department show that the country imported crude sunflower oil worth Rs 12.15 billion in the first 10 months of the current fiscal year, with exports reaching $ 1. 70 billion rupees during the same period. The country imported 103.911 million liters of crude sunflower oil during the review period.
Nepal imports most of its crude sunflower oil requirements from Ukraine, Russia and Argentina.
In the first 10 months of the current fiscal year, Nepal imported crude soybean oil worth Rs 39.46 billion and exported refined soybean oil worth 35.75 billion rupees. The country imported 355.29 million liters of crude soybean oil during the review period.
Nepal bought most of its soybean oil from Argentina, Egypt, Paraguay and Ukraine.
In recent months, soybean oil exports have increased as traders change tactics to continue exploiting preferential trade loopholes after the Indian government slashed palm oil imports.
As Nepalese soybean oil exports start to skyrocket despite near zero domestic production, the Indian government has officially requested the Nepalese government to verify the authenticity of the certificate of origin issued to local exporters.
“As the country goes through a health crisis, people are unable to come out and are forced to pay the prices traders say, so the government should take responsibility,” Ojha said.
Domestic manufacturers are exporting edible oil to India for profit as prices have increased in the Indian market, creating a shortage in the domestic market, he said.
Timilsina said the department stays away from the issue saying that the rise in international commodity prices has led to an increase in market prices in Nepal, which is not true. “The government lacks data on imports, shipping dates, inventory and supply, consumer and factory prices and price changes,” he said.
Besides the price spike, Timilsina said he had received complaints about the quality and quantity of edible oil.
Prakash Poudel, general manager of the department, said they were collecting information from producers on the reasons for the price hike.
“Based on the preliminary information we collected, we found that there is a huge difference between the factory price and the maximum retail price,” he said. “This could be due to higher commodity prices and a markup in the margin.”
He admitted that producers have been continuously raising prices in recent months. “We would have inspected their factories; but because of the coronavirus, we couldn’t do it, ”he added.