Vegetables Crash, Ghee & Oil Jump: Key Insights from Nepal CPI Mid-Month Data

Nepal’s mid-month CPI update for the first month of FY 2025/26 reflects a striking divergence between different food categories, underscoring both seasonal effects and structural price pressures. The Food and Beverages index, carrying 35.49% weight, fell by -2.28% year-on-year, easing household expenses in some areas. The biggest relief came from vegetables, which recorded a sharp -18.56% decline compared to last year. Similarly, spices (-4.81%) and meat and fish (-2.41%) dropped, reducing the burden on daily food costs.

However, this relief was countered by rising prices in other essentials. Ghee and oil jumped by 10.97%, continuing their upward trend, likely due to global oil price volatility and import dependence. Fruit prices rose 3.01%, while milk and eggs increased 1.83%, adding steady pressure to household budgets. Cereals, which are fundamental to Nepali diets, remained high with a 9.15% rise over three years, although their year-on-year movement was slightly softer at -0.87%.

The Non-food and Services category, which makes up the bulk of the index (64.51%), showed more consistent inflationary pressure, rising 3.95% year-on-year. Education costs jumped by 7.67%, while clothes and footwear rose 6.84%, and miscellaneous goods and services climbed 10.60%. In contrast, housing and utilities increased only 1.02%, and insurance and financial services dipped slightly (-0.22%), helping keep the non-food index relatively balanced.

This combination of plunging vegetable prices and rising costs in oil, fruit, and services reflects a dual inflation trend: short-term relief for households in fresh produce, but persistent structural pressure from essentials and services that households cannot avoid.