November 21, 2006	Tuesday	Shawwal 28, 1427

Aamir Shafaat Khan

KARACHI, Nov 20: Prices of ghee and cooking oil (16 kg tin) have been under pressure for the last one month, rising to Rs945 from 900 at the retail stage in the last two days, while it was Rs880 on November 1.

Some packers of one kg have enhanced the rates by Rs2 per kg, General Secretary Karachi Retail Grocers Group (KRGG), Farid Qureishi said.

However, main ghee and cooking oil players in the organised sector said that the rates had surged to over Rs1,000 per 16 kg tin on Monday. They said many retailers keep in their shops stocks of 16 kg tins manufactured by the unorganised sector. Their price is quoted on gross weight of the tin, which does not carry full 16 kg weight.

An executive in a leading ghee and cooking company, who asked not to be named, said that branded tins were expected to become costlier by Rs5 to Rs6 per litre/kg in cooking oil and ghee in view of the rising international prices of palm oil, palm olien etc.

“We are working on the price increase and may come out with a raise in December,” he said adding that not only the palm olien rates have surged in the world markets but the rate of canola imported seed has risen to $399 per ton from $270 before the month of Ramazan. Canola oil rates in local markets are now being quoted at Rs2,250 per 40 kg as compared to Rs2,000 two months back.

He further said that $565 per ton price of palm olien is for December shipments and in case prices rise for January shipments--the burden of increase will further be passed on to the consumers.

The 16 kg ghee and cooking oil tins hold around 50 per cent market share out of a total sale of 2.87 million tons per annum. The share of branded ghee and cooking oil products ranges between 15-20 per cent, while soft

packs in one kg holds the rest of the market.

Central Chairman Pakistan Vanaspati Manufacturers Association (PVMA), Shaikh Amjad Rasheed said that the rates of majority of branded ghee producers in 16 kg tin have surged to over Rs1,000. On Monday alone the rates have increased by Rs15.

Prices may remain under pressure owing to rising trend in palm oil and palm olien prices in world markets,” he said adding that palm olien rates in local markets were being quoted at Rs1,865 per 40 kg last week as compared to current rate of Rs1,915. It was priced at Rs1,750 a month back.

He said that palm olien rate (Malaysia/Indonesia) is now being quoted at $565 per ton as compared to $475-480 a month back. Amjad said that 40 per cent corn crop in many countries has already been sold out thus putting pressure on palm olien prices.

The government should think of reducing heavy duties and taxes on the import of palm olien in order to offset the impact of rising raw material prices and its negative impact on the consumers in shape of price hike. “The government eats up Rs21-22 per kg as duty and taxes on raw material imports,” he added.

Pakistani ghee and cooking oil also finds way into Afghanistan through legal channels. He said that some 15 units export 50,000 tons of ghee and cooking oil every year and they get refund of sales tax and duty from the government.