Flood Disrupts Kathmandu Supply Chain, Raising Market Risks

Floods and landslides have disrupted major roads connecting Kathmandu with the country’s key supply centers, increasing the risk of interruptions in the supply of essential goods to the capital. Damage along the Narayangadh–Muglin road and Prithvi Highway has affected the transportation of vegetables, food products, cooking gas and petroleum products. Although the government and Department of Roads have advised businesses to use alternative routes, traders say these routes require additional time and transportation costs. There is currently no widespread shortage of essential goods in Kathmandu. Businesses also believe that a short-term disruption is unlikely to cause a major increase in food prices. However, if the road closures continue for an extended period, pressure on food supplies and prices could increase. Hundreds of trucks carrying rice, pulses, cooking oil and other goods from India and the Terai region have reportedly been stranded along major highways. As existing stocks decline and businesses are forced to use more expensive alternative routes, additional transportation costs could eventually be passed on to consumers.