Food prices remain high despite fuel and commodity rates crash

Published March 31, 2020
KARACHI: People wait for their turn to buy grocery items on subsidied prices at a utility store on Monday. The rush on the government stores is rising as retailers are charging higher prices cashing in on the Covid-19 lockdown.—PPI
KARACHI: People wait for their turn to buy grocery items on subsidied prices at a utility store on Monday. The rush on the government stores is rising as retailers are charging higher prices cashing in on the Covid-19 lockdown.—PPI

KARACHI: Consumers are yet to get any benefit in commodity prices despite Rs20 per litre cut in diesel prices and declining international rates of pulses, tea and edible oil.

Manufacturers, wholesalers and retailers are cashing in on an extraordinary demand for commodities during the lockdown to contain the spread of coronavirus pandemic.

Traders usually avoid talking about any price cut in the wake of low transportation cost and decline in international commodities prices, diverting attention to rising import costs in the wake of rupee’s depreciation against the dollar.

In addition to burgeoning sales of essential commodities at wholesale markets, the rush of buyers in retail markets has intensified from 3pm to 5pm especially at super stores and retail markets as buyers rush to replenish stocks at home in order to avoid visiting markets during the lockdown.

The average prices of pulses in 8MFY20 fell to $496 per tonne from $540 but wholesalers have pushed up the prices in the domestic markets. Wholesalers have increased prices amid heavy buying from welfare trusts, upper class and industrialists, who are buying bulk quantities to distribute ration among unemployed and daily-wager earners.

Prices of per kg wholesale gram pulse rose to Rs145 from Rs130 followed by masoor to Rs150 from Rs100 per kg. Moong price swelled to Rs250 from Rs210 per kg, while mash price increased to Rs200 from Rs165 per kg.

Pulses imports during the July-Feb FY20 period stood at 754,885 tonnes ($375 million) as compared to 659,459 tonnes ($356.6m) in the same period last fiscal year, data released by the Pakistan Bureau of Statistics showed.

Karachi Wholesalers Grocers Association (KWGA) Chairman Anis Majeed said he cannot share price of pulses as the commodity remained in short supply after law enforcement agencies repeatedly detained vehicles at Karachi’s entry points which were arriving from Hyderabad and up country.

“Our sales of rice, sugar and pulses are up by 100 per cent because of extensive buying by welfare organisations, industries and rich people etc for providing ration to the needy families.” Pulses prices had mainly surged on soaring demand, he added.

The government on Monday had extended another relief to pulses importers by bringing down advance tax on import to zero from 2pc.

Volatile exchange rate continues to offset the benefit of low diesel prices and falling global commodity prices and that would even dilute the impact of zero advance tax on import of pulses, Anis said while claiming that transporters had also not reduced their fares.

He said transporters are also facing labor shortage as many of them had already returned to their native areas after coronavirus. Despite a drop in diesel prices, transporters are charging higher fares from wholesalers.

The average world palm oil price dropped to $587 per tonne from $604 but ghee and cooking oil prices have remained high during the last eight months. Palm oil imports in 8MFY20 stood at 2.012m tonnes ($1.182 billion) as compared to 2.044m tonnes ($1.23bn) in the same period last fiscal year.

To bring down prices, the government on Monday exempted additional customs duty of 2pc on palm oil imports.

Pakistan Vanaspati Manufacturers Association (PVMA) former vice chairman Sheikh Umer Rehan said the palm oil prices in the international market have risen to $615 per tonne from $550 per tonne in the last 10 days after buying from China resumed.

He calculated a jump of Rs20 per kg/litre in ghee and cooking oil prices as a result of rupee depreciation against the dollar and increase in international palm oil prices.

Umer said that bringing down tax on import of palm oil to zero from 2pc would not have any significant impact on domestic prices of ghee and cooking oil.

Local tea prices maintained an upward trend despite decline in world average prices to $2,405 per tonne from $2,632 in 8MFY19. Total tea imports in the last eight months fell to 134,853 tonnes ($324m) from 149,510 tonnes ($393m).

Published in Dawn, March 31st, 2020

Opinion

Let women be, control the man
Updated 11 Apr 2021

Let women be, control the man

Men need to be educated and then read the riot act. The enforcement of the law must be merciless in such cases.
Twixt torch & tray
11 Apr 2021

Twixt torch & tray

Some may say that the lawyers’ indignation is not without merit.
Behaviour bond
10 Apr 2021

Behaviour bond

States have turned the imitation of repressive laws into an art form...

Editorial

11 Apr 2021

Dissension within PTI

WITH the dust from the PDM’s implosion still not fully settled, the PTI is now faced with growing dissension from...
11 Apr 2021

Power to arrest

A SUPREME Court verdict announced on Thursday spelled out what might be considered a self-evident truth in any...
11 Apr 2021

Unequal vaccine distribution

IT is in times of crisis that we often see the best — or worst — of humanity. In this regard, the pandemic has...
10 Apr 2021

Greater tax burden

THE FBR’s tax target of Rs6tr for the next year under the IMF-mandated fiscal adjustment policies will increase ...
UK travel ban
Updated 10 Apr 2021

UK travel ban

Pakistan continued to allow passengers to arrive without quarantine requirements.
10 Apr 2021

IS in Mozambique

IT was not too long ago when the dreaded shock troops of the self-declared Islamic State group were rampaging ...