BY the time National Price Monitoring Committee (NPMC) takes notice of the price hike of any essential items, all the stakeholders have already enjoyed charging higher prices. In many cases, they further raise prices after the NPMC meeting in the absence of any writ of federal, provincial and city governments.
The same situation exists whenever Prime Minister Imran Khan warns of any action over profiteering.
If a new committee is set up to probe or control a price hike then it clearly indicates that the government is mainly fulfilling its official duty rather than taking price issues seriously. Lethargy in taking any action at the start of a price hike gives a free hand to the market mafias, profiteers and hoarders to take the prices to its climax.
The federal and provincial governments take months to wake up over the rising prices. The money involved in commodity trading changes hands multiple times among stakeholders by the time the government decides to curb prices and deal strictly with traders, wholesalers, hoarders, middlemen etc.
Now the consumers have realised that price monitoring meetings, probes and investigation are just an eyewash and will never ever bring down prices. Even probes do not create any fear among the market traders and manufacturers.
Meetings are only held to review situations rather than finding the root cause of the price hike. After issuing instructions to the provincial authorities to take action, the case is closed till the next meeting
Companies and market players waste no time in raising diesel prices but delay in transferring the price cut benefit to consumers. The price of diesel has dropped by Rs47 per litre from Rs147.26 on February 1, 2020, to Rs80.15 per litre now. Traders and manufacturers of goods avoid discussing relief to consumers on low transportation cost. Prime Minister Imran Khan has asked authorities to ensure price relief on transportation but so far this instruction has remained on record of media alone.
A number of traders said how prices can fall on low transportation costs even though the dollar continues its upward trajectory against the rupee, making imported finished goods and raw materials costlier. Rising dollar value also takes away any duty relief on imported items and raw materials imports.
Consumers have yet to see any price cut in sugar and flour despite ongoing probes in these two cash crops. Consumers continue to pay Rs85 per kg for sweetener which was Rs75 in January 2020 and Rs60-65 per kg in January 2019. Islamabad High Court also ordered selling of sugar at Rs70 in the current month but so far the sugar rate is still high.
Before any religious occasions, especially before either of Eid, the government machinery becomes inactive leaving the consumers at the mercy of market forces which raise prices without any fear of being fined or jailed for profiteering.
Meat merchants have made an annual ritual of soaring prices before Eid attributing different reasons but the government has never bothered to keep a vigil on pre-Eid shocks and taken action against meat merchants. Before Eidul Fitr, red meat sellers raised prices citing animal shortage due to closure of sacrificial animal markets at various points owing to coronavirus.
The NPMC held in the third week of June woke up very late over the continuous increase in prices, asking provincial governments to take action against profiteers and bring down prices. The decision fell on deaf ears of provincial government officials.
Pakistan Poultry Association (PPA) had already alerted consumers in the last week of March regarding a price blast in coming months as farmers are not keeping day-old chicks to raise due to the massive decline in demand caused by the closure of marriage and engagement ceremonies during the lockdown.
In the absence of the government cross-checking PPA’s claim, consumers took a costly ride by paying Rs290 per kg for a live bird and Rs450-500 per kg for its meat in the last week of May while it was priced at Rs160 per kg for a live bird and Rs280 per kg earlier in May.
The NPMC meeting, chaired by its chairman Federal Secretary Finance Naveed Kamran Baloch, reviewed prices of essential food commodities and poultry prices but strangely the media reports of the session did not mention high poultry prices for which the meeting has been held.
Poultry is the only meat-related item whose prices move both ways as compared to rising price trends in veal and mutton, making it easy to take credit for any fall in poultry price after the NPMC meeting.
The NPMC also directed the Ministry of National Food Security to coordinate and consult with the provincial governments to monitor and control prices of wheat and wheat flour and take measures to ensure their smooth supply, providing relief to the masses. Just after this direction, the Sindh chapter of Pakistan Flour Mills Association increased the price of flour varieties citing the old unresolved issue of the non-release of vehicles loaded with wheat arriving from interior Sindh by provincial food department officials. Based on the same problem, flour millers have surged prices by Rs11 per kg and Rs9 per kg on flour and maida respectively, from the last week of April till date.
Sindh flour mills have sounded an alarm of a severe crisis brewing as wheat is moving to Punjab and Balochistan where prices are high. They demand strict measures to seize borders of Punjab and Balochistan to control its movement.
According to a miller, reports are now coming that the Sindh government has procured more than the target of 1.4 million tonnes of wheat, at Rs3,500 per 100kg bag. The surplus wheat is finding its way into the open market at Rs4,500 per 100kg bag.
Flour millers enjoyed their heydays when consumers went wild in March to lift flour bags more than their requirement amid panic buying at the start of the lockdown. Retailers charged an extra Rs50-70 per bag on five and 10kg bags but it went unnoticed.
When charitable organisations were distributing ration, dealers of pulses cashed in the demand by prices by Rs 20-50 per kg while also clearing out their old substandard stocks.
NPMC meetings are only held to review price situations rather than finding the root cause of the price hike. After issuing instructions to the provincial authorities to take action, the case is closed till the next meeting.
Published in Dawn, The Business and Finance Weekly, June 29th, 2020