KARACHI: Ghee prices shoot up amid strike by mills
By Aamir Shafaat Khan
KARACHI, July 24: Wholesale price of 16-kg ghee tins flared up by Rs50 per tin in the markets as a result of the countrywide strike enforced by the Pakistan Vanaspati Manufacturers Association (PVMA) in protest against the non-payment of sales tax refunds for the year 2002-03 by the Central Board of Revenue (CBR).
The 16-kg ghee tins of different brands — Mezan, Kissan, Royal, Maaz, Resham, Shaheen, GCP Hilal, etc. — until Wednesday selling at Rs800, have been tagged at Rs850 (wholesale) in a majority of the city markets, General Secretary, Karachi Retail Grocers Group (KRGG), Mohammad Farid Qureishi told Dawn on Thursday.
Shopkeepers are now selling the 16-kg ghee tins after adding Rs5 to Rs10 per pack at the retail level.
He said some of their distributors had already suspended sales to retailers and wholesalers on Wednesday while the others were not releasing the ghee in order to gain more profit in case mills remained closed for another few days.
Shopkeepers usually maintain an eight-day stock of the 16-kg ghee tins. Situation relating to prices and stocks may get alarming in case millers do not resume their operations in next few days, he said adding that all the mills producing 16-kg tins, particularly in Landhi and Korangi, had kept the production suspended on Thursday.
However, in a surprise move, the active members of the PVMA — Unilever, Zulfiqar Industries, Habib Oil Mills, Soya Supreme and two/three other manufacturers — have deviated from the strike call and continued their normal operations throughout the day.
“We are the active members of the PVMA but are not part of this strike,” senior executives in the leading ghee mills told Dawn.
“Actually we are comfortable with the CBR in sales tax refund issue. We have not claimed any amount from the government in this regard yet,” a senior executive in a multi-national company said.
Leading ghee packers have maintained an understanding with the distributors. They pay 20 per cent sales tax at import stage of edible oil and adjust at the stage of sales to the distributors. In rupee terms, Rs8 to Rs9 per kg is paid at a time of import and the company gets the same amount from the distributors at the rate of 15 per cent at the time of sales, according to him.
“Actually PVMA striking members are selling ghee at low rates and demanding refund from the CBR, which is not fair,” he said.
Price of the ghee produced by leading mills ranges between Rs65 and Rs80 per kg as compared to Rs50-55 being sold by the a large number of ghee millers. Even some ghee packers are selling ghee at Rs45 per kg.
It may be noted here that the multi-national ghee packers, claiming to be the active members of the PVMA, always keep themselves on the sidelines whenever it gives a strike call on some issue.
Ghee and cooking oil production of Unilever ranges between 60,000 and 70,000 tons per year followed by 60,000 to 68,000 tons of Habib Oil Mills and 15,000-20,000 tons of Zulfiqar Industries.
President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Riaz Ahmed Tata, has called for immediate intervention by Finance Minister Shaukat Aziz for resolving the issue.
In a letter to Mr Aziz, he described the strike as a serious matter. He said it seemed that the apathy of some taxation officials towards the problems and difficulties being faced by the ghee makers was responsible for this unwarranted situation.
