January 6: The rise in transportation cost of daily essentials and raw materials coming from third countries is expected to increase inflation in the domestic market of Nepal.

Industrialists say that the hike in transportation cost of mustard and soybean oil as well as plastic, coal, iron and other raw materials required for the industrial sector is certain to impact the local market of the country.

The transportation cost of one ton of plastic has been increased by $400. The transportation cost which was $800 per ton has not reached as high as $1200 for plastic, says operator of Bagmati Plastic Nanda Kishor Rathi.

According to Rathi, the increase in transportation cost has forced them to raise the price of plastic products by Rs 8 to Rs 10 per kilogram. Around 16 to 17 tons of plastic is imported in one container. The UAE, South Africa, Singapore and India supplies plastics to Nepal.

The transshipment cost from China has also skyrocketed. The cost of transporting goods using a 40-feet container was US$ 1600, which has not climbed to US$ 5400.

The importers have been forced to hold their goods due to the sudden hike in transportation cost.

Former chairman of Morang Chamber of Commerce Pawan Sharada says that the shipping companies have been increasing fare arbitrarily citing coronavirus pandemic. Goods that used to arrive within 15 to 20 days now take between 30 to 40 days to arrive. This has also resulted in shortage of raw materials in the country.

The impact has already been felt in the prices of edible oil, electronic goods, industrial raw materials among others. The price of edible oil has already increased by Rs 10 per litre while utensils made of iron, plastics as well as cement are also increasing.

According to Rathi, the increase in price of plastics has had a chain effect which is evident from the price hike of packaging materials. Once the price of packaging materials goes up, the prices of all industrial products also get hiked, says Rathi.