Cooking oil, ghee prices jump by Rs32 per 5 litre/kg pack
By Aamir Shafaat Khan
KARACHI, July 17: Consumers are set to receive another pre-Ramazan shock as a leading packer has further increased the rate of 5-litre cooking oil and 5-kg ghee tins by Rs32. This is the fifth price increase since September 2006.
The other packers have not yet announced the new rates but they will follow suit.
A 5-litre oil tin and five kg ghee pack of Dalda will now be available at Rs530 as compared to Rs498. The 2.5-litre oil and 2.5 kg ghee tins will be available at Rs275 as compared to Rs260. The one kg pouch will now be marketed at Rs104 as compared to Rs97.
Director Dalda Foods Inam Bari told Dawn that dispatches to the distributors had already been started from July 16 at new prices. However, distributors now have very large quantities of old stocks and the consumers will see the increase after one week, he added.
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 selling at Rs205.
Inam said that the international palm olein price was being quoted at $830 per ton but the company had actually adjusted the rate of previous increases in edible oil prices.
Palm olein rates had surged to $765 per ton in May 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 Rs2,680-2,700 as compared with Rs2,480 per 37.324 kg in May and Rs2,200 in March.
He said after the announcement of the budget 2007-08, the government was unlikely to cut import duty and tax on palm olein. But it should consider reducing taxes and duty on packaging material like tin plates and other material used in making of one kg pouch in order to provide relief to the consumers.
The government is still eating up Rs22-23 per kg in terms of taxes and duties, Bari said. The local industry relies on import of 100,000-125,000 tons per month of palm olein for ghee and cooking oil production.
The country consumes around 2.5 million tons of ghee and cooking oil every year in which the share of 16 kg tin is around 60 per cent while the rest is enjoyed by the packers of one kg pouch to five kg tins.
The market analysts believe that the palm olein prices had been on the decline for the last few days then why the local industry is bent upon increasing the rates.
Chairman Pakistan Vanaspati Manufacturers Association (PVMA) Shaikh Amjad Rashid said that the palm olein rates had climbed to $870 and then returned to $830 per ton for just two days, which does not hold any solid ground for local price reduction.
The industry has seen the jump in palm olein rates from $415 in January 2007 to $830 currently but the higher prices had not been passed on to the consumers with the same proportion.
On price difference between the utility stores and local market, he said the government should consider its subsidy scheme or at least bring it to a difference of Rs2 to 3 per kg at par with the subsidy provided in case of sugar.
Giving an example, he said sugar price for consumers at utility stores is Rs25 per kg and wholesale rate is Rs27.50 per kg. In case of ghee, the current market price on average is Rs85 per kg and Dalda’s one pouch price is Rs104 per kg, while the subsidized rate is Rs67 per kg at the government stores. The total difference comes to Rs18 per kg. Big difference will naturally create a room for malpractices and adverse sale effects on all the units, he added.
