Consumer prices are projected to rise as a result of increased container transportation charges.


There is even more bad news for Nepalis who are already suffering from inflation: they may expect another year of escalating prices, according to sources. The United Nations Conference on Trade and Development (UNCTAD) has predicted that increasing shipping costs will drive up the cost of goods over the next year, according to their predictions.




According to a UNCTAD research published on November 18, a rise in global container shipping rates might result in a 2.2 percent increase in consumer prices in the least countries (LDCs) over the next year, based on an increase in import costs of 8.7 percent over the same period.

According to the analysis, persistent high rates are already having an impact on global supply chains. It is possible that the increase in container freight rates will cause national economies to slow, particularly in structurally weak countries such as small island developing states, least countries, and landlocked developing countries, whose consumption and production patterns are heavily reliant on international trade.

Shipping expenses are a significant of the price of food and non-food items in developing nations such as Nepal.

The increase in container freight rates will increase the price of manufacturing, which will ultimately be passed on to the end user, the customer.

Increasing demand for freight transportation, a scarcity of shipping containers, and restricted capacity and congestion at ports all contributed to an increase in container freight costs, according to the survey, which noted that the impact was often stronger in smaller economies.

According to the research, whereas worldwide inflation was 2.8 percent last year, consumer price inflation in the LDCs was 22.4 percent, a significant difference.


According to the survey, prices of the top ten products are predicted to rise by 6.4 to 11.4 percent in the coming year. Computers, electronics, and optical products would see an increase in price of 11.4 percent, while textiles, apparel, and leather products will see an increase in price of 10.2 percent, according to forecasts.

A 7.5 percent increase in the cost of electrical equipment and other transportation equipment, as well as motor vehicles, trailers, and semi-trailers will be implemented. According to the estimate, the prices of basic pharmaceutical items and pharmaceutical preparations will rise by 7.5 percent in the coming year.

Nepal is heavily reliant on the importation of products. As a result, the country’s foreign exchange reserves have been diminishing as a result of the increased of money spent on imports.

Accordig to the Department of Customs, Nepal’s imports increased by 61.57 percent to Rs650.29 billion in the first four months of the current fiscal year, according to the Department of Customs (mid-July to mid-November). During the period under consideration, the trade imbalance increased by 56.83 percent.

Nepal’s imports increased by 28.66 percent year on year in the most recent fiscal year 2020-21, reaching Rs1.53 trillion in total.

In addition, exports increased by 104.29 percent in the first four months of the year, with shipments totaling Rs82.12 billion. Nepal’s overall foreign trade was dominated by imports, which accounted for 88.79 percent of the total.

Following a decline of 5.7 percent to Rs1,319.32 billion in mid-October 2021 from Rs1,399.02 billion in mid-July 2021, the central bank reported that gross foreign exchange reserves had decreased to Rs1,319.32 billion. Nepal Rastra Bank’s foreign exchange reserves declined by 8 percent in mid-October 2021, from Rs1,244.63 billion in mid-July 2021 to Rs1,145.29 billion in mid-October 2021, representing a portion of the overall foreign exchange reserves.


The majority of imports for consumption are financed through remittances. The of money received in remittances has also begun to decline.

Recent central bank figures show that the of money sent back home by Nepalis living abroad decreased by 7.6 percent in the first quarter of the current fiscal year (mid-August to mid-October), compared to an increase of 12.7 percent in the same time of the previous fiscal year.

According to experts, an increase in worldwide inflation was one of the factors contributing to the decline in remittances, as Nepali migrant workers forced to spend more on their living expenses, leaving them with less money to send home.

Price spike estimates minimized by trade economist Posh Raj Pandey, who stated that because two-thirds of Nepal’s trade is handled with its neighbor India, the impact of additional transportation costs will be negligible, according to the Associated Press.

“In the first instance, India bears the burden of maritime transportation rates, and later Nepal bears the burden.” Accordingly, Pandey believes that the increase in transportation costs will not have a significant impact on Nepal’s economy.

According to him, an increase in the price of fuel has resulted in an increase in consumer costs in Nepal. Exports to other countries will be severely hampered as a result of higher transportation costs, according to him.

Because of the increase in trade expenses, Pandey believes that items such as garments, tea, and carpet that are shipped to third-world countries will have a detrimental impact.


Exporting to the United States has already more than tripled, according to experts, as a result of the pandemic, making it impossible for Nepali products to compete with those from neighboring nations in the American market.

Nepali products are unable to compete with those produced in neighboring countries as a result of the high costs, so the government should closely monitor exchange rates and look for solutions to bring prices back to where they before the pandemic, according to Kiran Prakash Saakha, president of the Nepal-USA Chamber of Commerce and Industry, in a recent interview with The Nepal Post.

The United Nations Conference on Trade and Development (UNCTAD) called on governments to monitor markets to ensure a fair, transparent, and competitive commercial environment, and recommended greater data sharing and stronger collaboration among stakeholders in the maritime supply chain in order to address high freight rates.

The high rates will also have an impact on low-value-added items such as furniture, textiles, clothing, and leather products, whose production is often fragmented across low-wage economies that are far away from major consumer markets; the United Nations Conference on Trade and Development (UNCTAD) predicts a consumer price increase of 10.2 percent on these items in 2015.

An overwhelming majority of respondents to the central bank’s inflation outlook survey predict average prices of goods and services to climb by a whopping 11.3 percent over the next year.

Exports of goods and services amounted for 32.83 percent of Nepal’s gross domestic product in fiscal 2020-21, according to official figures.

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