May 04, 2007	Friday	Rabi-us-Sani 16, 1428

KARACHI, May 3: A leading packer of cooking oil and ghee has increased the rate of 5-litre oil and 5-kg ghee tins by Rs28 and Rs33, respectively, from May 1 to Rs498. This is the fourth increase since September 2006.

A 5-litre oil tin of Dalda will now be available at Rs498 as compared with Rs470, while 5-kg ghee tin will cost Rs498 as compared with Rs465 earlier. The 2.5 litre oil and 2.5 kg ghee tins will be available at Rs260 as compared with Rs 240.

Director Dalda Foods Inam Bari said dispatches to the distributors had already been started from May 1, at new prices. However, distributors usually had old stocks of four to one week time. Consumers will see the increase after one week, he said.

The packers had already increased the rates in February, 2007 by Rs4.8 to Rs6 per kg/litre on ghee and cooking oil tins. Earlier they had increased the rate ahead of Ramazan (September 2006) by Rs4 per kg followed by Rs5 per kg in December 2006.

In September 2006, 5-kg ghee tin was available at Rs395 while 2.5 kg ghee tin was tagged at Rs205.

“The government is eating up Rs22 per kg in terms of taxes and duties,” Mr Bari said adding that if other elements like duties and taxes on tin plates and other packing material are taken into account then the impact comes to Rs35-40 per kg.

If the government slashes the import duty and taxes on palm olein and on packing material then the actual selling price would come down between Rs50-60 per kg.

He cited the example of India which has curtailed the import duty on palm olein twice in the last two months to offset the impact on local prices and provide relief to the consumers, he said.

He linked the rising price of ghee and cooking oil to persistent increase in palm olein prices in Malaysia and Indonesia. Palm olein rates have surged to $765 per ton for May shipments as compared to $740 per ton in April.

In the middle of March its rate was $632 per ton while in January 2007, it was being quoted at $417 per ton. The local rate of palm olein is now being quoted at Rs2,480 per 37.324 kg as compared to Rs2,200 in March.

The local industry relies on import of 100,000-125,000 tons per month of palm olein for ghee and cooking oil production.

The industry also takes some local raw material for blending purpose. For example 400,000 tons of cottonseed oil (during October to February period), 70,000-80,000 tons from two crops of sun flower (from May-November), local canola of 40,000-50,000 tons and some 400,000 tons of oil, which is fetched from the import of one million tons of Canadian and European canola seed.

“If palm olien rates further go up then the company may come out with another increase in prices of Rs4 per kg in June,” he said.

It has been seen that other companies come out with new prices soon after the increase in rates by Dalda. Pakistan Vanaspati Manufacturers Association has been pressing the government to rationalise duty and taxes on import of palm olein but the government has not paid any heed to the demand.