ISLAMABAD, July 29: The government informed the National Assembly on Thursday that prices of daily consumer items had increased during 2003-04.
In a written response to a question by MNA Inayat Begum, finance minister Shaukat Aziz conceded that prices of daily consumer items such as wheat flour, rice, meat, edible oil and onions had increase.
He claimed the average price of 53 daily consumer items covered under Sensitive Price Index (SPI) had remained stable during 2002-03 but increased in 2003-04. In the Economic Survey of 2003-04, the government had conceded that food items' prices had increased 50 per cent against 38 per cent for the same period in 2002-03.
Explaining the reason for the increase, Mr Aziz told the House that several factors were responsible for the price hike. Rationalising the increase in the price of wheat flour throughout the country before the National Assembly, Mr Aziz reproduced paragraphs verbatim from the Economic Survey 2003- 04 which said the shortage of wheat in the market had been caused by various factors including a 16.7 per cent increase in the support price of wheat for the year 2004 crops, below target production during 2003, delay in the import of wheat, depletion of wheat stocks due to exports in the preceding two years and withholding of wheat supply by hoarders and speculators.
Shifting the blame for increase in edible oil prices on international factors as done earlier in the Economic Survey 2003-04, the finance minister informed the House that increase of edible oil price in the local market was linked to a 31 per cent increase in palm oil prices in the world market due to tight global supply.
Holding natural factors responsible for increase in the price of onions, Mr Aziz briefed the House that damage to onion crop in Sindh by heavy rains and supply gaps pushed onion prices up in the local market.
Explaining the hike in prices of mutton and beef, Mr Aziz said the increase was attributed to greater demand of mutton and beef due to bird flu virus. Elaborating the measures taken by the government to control prices, the finance minister said that import of essential items had been liberalised to boost supply and to meet dearth of essential items.
According to Mr Aziz, the government had taken a umber of steps to control the price of wheat flour by banning the wheat export and importing one million tons of wheat on an urgent basis to build strategic reserves.
He informed the House that to discourage the private sector to hoard wheat, the State Bank of Pakistan had imposed a cash margin of 50 per cent for borrowing for the wheat procurement and retire the borrowed amount by September 2004.
