Kathmandu, Aug. 19 -- With food prices rocketing into the stratosphere due to tax hikes and shrinking domestic production, the upcoming festival season is poised to strain household budgets.

Traders said that people will have to dig deep into their pockets when they do their festival shopping for the impending Dashain, Tihar and Chhath, the most widely observed celebrations in Nepal. Vegetables, fruits, dried fruits, meat, edible oil, sugar, legumes, flour and rice have all become dearer, and prices are expected to increase further, they said.

The government has increased the customs duty on foreign farm and industrial products in a bid to hold down imports and trim the ballooning trade deficit.

The higher tariffs have pushed up food p...