Prices of wheat, up for a few months, remained high even during Ramazan when the demand was stated to be normally lower than usual. Rice became costlier due to depleting stocks and prices of cooking oil and pulses went up with the increase in demand.

Commodity dealers say importers have so far booked about 300,000 tonnes of wheat and may buy another half a million tonnes till March 2014 before the harvest of the new crop immediately afterwards.

Most of the importers had booked Black Sea wheat for August-September delivery at $280-$285 per tonne, according to a Jodia Bazar-based dealer. The prices are now on the rise on reports of higher import requirements of Bangladesh and lower-than-targeted production in Russia but are still below $300 per tonne.

“So, if withholding tax on imports is withdrawn, it would be alright. But if it remains in place the landed cost of imports would be at par with the local prices,” said another dealer. According to official estimates, Pakistan needs to import a total of 800,000 tonnes of wheat before the arrival of the next crop.

Output of less than targeted 2.5 million tonnes in marketing year 2012-13 has spiralled up wheat prices by 25 per cent in a year to August 7, 2013, according to data released by Pakistan Bureau of Statistics. Average retail price of packed wheat flour has risen by 29 per cent.

Some traders say that wheat exports in the last fiscal year and low procurement of the grain by federal and provincial governments have pushed up prices in the open market.

Market sources say that prices of Basmati rice varieties moved further up in Ramazan in continuation of the trend that had set in from the beginning of this year. But prices of broken Basmati and Irri-6 varieties remained flat. They say that Ramazan-related rise in demand for supreme quality of rice and reports of rains-related damage to new paddy crop also moved Basmati prices up despite the fact that exports-led buying remained subdued. On the other hand, the impact of larger purchases of non-Basmati varieties by exporters was offset by flat demand during Ramazan, thus keeping their prices under control.

Cooking oil prices, as usual, started shooting up right from the beginning of Ramazan (July 10) and remained high throughout the holy month as consumption increased for preparing Ramazan-specific oily cuisine. The increase in prices of cooking oil, or for that matter other food items, during this Ramazan was higher, also because of inflationary measures announced in the budget.

This is why, even prices of items, local production of which was sufficient enough to meet the requirement, went up. Cooking oil is one of them as its production nowadays is up about 12 per cent, more than double the annual rate of increase in domestic demand. Besides, “despite all claims to the contrary, smuggling of cooking oil and wheat flour to Afghanistan and Iran is still going on,” a senior executive of a Karachi-based edible oil manufacturing company told Dawn.

Normally prices of gram shoots up during every Ramazan because of a big rise in its demand. This year was no exception. But the extent of price-hike was smaller compared to previous years as local production of gram (black) had increased three-fold to about 900,000 tonnes. Prices of gram (white), however, showed a sharper increase both on account of additional demand and also due to fact that the country produces only a small quantity of it and relies heavily on imports from Australia, Turkey and some other countries. Depreciation of the rupee value against the dollar is another factor that pushed up prices of imported food items like gram (white) and mash and masoor pulses.

Poultry meat prices showed the sharpest increase during the month of Ramazan—and most notably before Eid — both due to a big jump in demand and disruption in supply networks due to heavy rains in and around the areas populated by poultry farms. Interestingly, whereas roadside retailers of poultry meat were generally overcharging customers, manufacturers of branded chicken meat like K&Ns and Value Chicken offered special cuts in prices in an attempt to expand sales taking advantage of an increase in demand.

Initially Meat One, suppliers of processed and packed beef and mutton had also announced special Ramazan packages but they failed to boost sales. An office-bearer of Meat Merchants Association told Dawn that growing exports of mutton amid disturbed supplies of goats from Balochistan and interior of Sindh to Karachi were two key factors behind an exceptionally big rise in prices this year.

The Utility Stores Corporation was tasked to supply hundreds of items including rice, pulses and cooking oil on subsidised rates. The USC officials said overall sales this year were much higher than in the previous years, more than Rs15 billion by some accounts. They claim that this had a trickle-down impact on open market prices as well.—Mohiuddin Aazim