KARACHI: Perturbed by soaring dollar prices, many importers of food items have put on hold sales of foreign goods in the market while others continue business as usual under a long-term commitment with foreign buyers.
Talking to Dawn Karachi Wholesalers Grocers Association (KWGA) Patron-in-Chief Anis Majeed said the uncertain rupee-dollar parity would hit masses badly due to rising cost of imports.
“We are clearing our goods from the port and moving these to godowns. However, we are not bringing any of these items in the wholesale market due to unfeasible cost,” he said.
“If the landed cost of imported goods is higher as compared to low prevailing market rates then traders cannot afford to suffer any losses,” he added.
The KWGA chief said imports of items including pulses are continuing. “However, our members have slightly slowed down on fresh commitments from foreign suppliers for pulses and other items hoping for some stability in rupee-dollar parity,” he said.
Chairman Pakistan Vanaspati Manufacturers Association (PVMA) Tariq Ullah Sufi said imports of palm oil are going on. “We have maintained our pace of entering fresh commitments of palm oil. If rupee continues to lose its strength against the dollar then it may cause some fall in the volume of palm oil imports.”
While pointing out one negative impact under volatile exchange rate, he said, “We are considering taking back Rs5 per kg/litre discount of ghee and cooking oil in the next week due to cost escalation in palm oil imports.” The ghee and cooking oil industries had announced the said discount ahead of Ramazan.
The PVMA chairman said he had cleared palm oil at Rs146 to a dollar on Friday which is now at Rs151.
Falling rupee value against the greenback may pose serious challenges for unbranded manufacturers as price hike in ghee and cooking oil would intensify market competition, thus creating problems for many manufacturers, Mr Sufi added.
Nasir Arain, marketing manager at a fast moving consumer goods (FMCGs) importing company said, “We have no option. We are bound to clear goods from the port as per commitment with foreign buyers otherwise holding goods’ clearance means soaring demurrages.”
He said many importers have been working with foreign suppliers under six months or one year agreement of import and at this stage we cannot take an adverse decision.
The price of imported FMCGs had surged by 15-20 per cent despite the fact that one dollar is now equal to Rs151 which was Rs110 in January 2018, said Arain.
“We cannot pass on full impact of rupee devaluation as buying power of people has shrunk by 40-50 per cent in the last 14 months,” he said.
Chairman Pakistan Tea Association (PTA), Mohammad Shoaib Paracha said “Our members are clearing their stocks from the port. New orders are also being placed. Being an essential item, import of tea will continue.”
On impact in value of one dollar surge to Rs151 from Rs141 in the last few days, he estimated increase in landed cost of imported tea by Rs35-40 per kg.
He feared decline in tea imports in case dollar continues to overwhelm rupee in future, adding “Much would also depend on international tea prices.”
Published in Dawn, May 19th, 2019