Buy summer clothes? you can sweat

Like every night after supper, when Prakriti Chaudhary was scrolling through Instagram, a beautiful one-piece sundress on a shopping portal caught her eye. She asked for the price and was amazed to learn how much it cost.

“The price was 2,600 rupees for a one-piece dress and a summer cardigan,” said Chaudhary, who works for an education consultancy firm in Putali Sadak.

Clothes and shoes have become more expensive, shoppers complain. The rise in prices is confirmed by figures from the central bank.

According to the Nepal Rastra Bank’s macroeconomic and financial report, the prices of garments and footwear increased by 4.53% in the first seven months of the current financial year which ended in mid-February. The figure was 2.82% in the same period last fiscal year.

Consumer price inflation stood at 5.97% in the first seven months of the current fiscal year, down from 2.70% a year ago. Food and beverage inflation was recorded at 6.00 percent while non-food and service inflation reached 5.96 percent, the central bank said. Transport inflation increased to 15.87% in the first seven months of the current fiscal year, compared to 4.76% in the same period of the previous fiscal year.

“Clothes have become more expensive by almost 50% compared to pre-pandemic times, with customs duties increasing by 175% and shipping costs jumping by 300%,” said Sumi Deepa Chhetri, owner of Dressmandu, a women’s clothing and accessories store in Durbarmarg. To post.

“The clothes are flown in from China on charter flights, which means shipping costs have more than tripled,” said Chhetri, who imports most of his inventory from the northern neighbor. “Customs duties have also increased, and all of these additional costs are coming out of the customer’s pocket.”

In a recent interview with the Post, Sunil Kumar Dhanuka, president of Nepal’s Foreign Trade Association, said transportation costs had risen sharply after the pandemic. It costs $6,000 to $6,500 to ship a 20ft container from China to Nepal, and $10,500 to $11,500 to ship a 40ft container.

Before the pandemic, fees were $1,800 to $2,000 for a 20-foot container and $2,800 for a 40-foot container.

An increase in freight costs means an increase in the price of goods by more than 20-25% for traders, which is obviously passed on to the consumer.

“The price of the upcoming summer dresses is going to be higher because the government has made it compulsory to import goods by opening a letter of credit,” Chhetri said.

Potential buyer Chaudhary is disappointed that she couldn’t add the dress she wanted so badly to her wardrobe because it was so expensive.

Chhetri says sales have not dropped despite the higher prices.

“However, as prices are expected to rise further in the coming days, I cannot say how the market will react in the upcoming summer shopping season,” she added.

Economist Jagadish Chandra Pokharel says more expensive clothes and shoes would drive down sales as incomes have not increased accordingly.

“People are currently more concerned about stretching their money,” he said. “A decline in clothing and footwear sales can be a factor in slowing the economy, as consumer spending is the main driver of Nepal’s economy. The government can control hoarding to control prices.

According to the Trade and Export Promotion Center, imports of garments and clothing accessories increased by 27.9% to Rs 22.72 billion in the first seven months of the current fiscal year ended at mid February.

Nepal imported garments and clothing accessories worth Rs 30.10 billion in the last fiscal year 2020-21. In the financial year 2018-2019, imports of garments and clothing accessories were valued at Rs 31.82 billion.

The country’s footwear imports amounted to 5.60 billion rupees in the first seven months of the current fiscal year, according to the Customs Department.

Footwear imports totaled Rs 6.77 billion in FY 2020-21 and Rs 7.83 billion in FY 2018-19. Nepal imports most of its clothing, clothing accessories and footwear needs from China.

According to a report by the United Nations Conference on Trade and Development released on November 18 last year, soaring global container shipping rates could raise consumer prices by 2.2% in countries. least developed over the next year, based on an increase of 8.7%. in import prices.

Shipping costs are a key component of food and non-food prices in countries like Nepal.

Container freight rates soared amid rising demand for freight transport, shortages of shipping containers, limited capacity and congestion at ports, the report said, adding that the impact was generally more important in smaller economies.

The report expects prices for textiles, clothing and leather products to rise 10.2%.

While the global inflation rate was 2.8 percent last year, consumer price inflation in least developed countries like Nepal was 22.4 percent, according to the report.

Along with more expensive imports hitting consumers, domestic apparel manufacturers also said their production costs had risen by more than 25%.

Suraj Raj Pandey, CEO and founder of Fibro, a Kathmandu-based clothing manufacturer, said the price of raw materials, which are mostly imported, had more than doubled. A spike in labor costs has also increased the cost of production, according to Pandey.

Chaudhary, meanwhile, dropped plans to add the clothes she loved to her wardrobe.

“Given the price of the clothes, I think I’m going to have to stick with wearing the clothes I already have,” Chaudhary said. “I’m going to do just a few essential purchases instead.”

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