Rising rupee fails to arrest food price spiral

Published October 18, 2020
Prices of moong and mash have risen in the international markets. Pakistan imports the two lentils from Brazil, Argentina, Burma, Thailand and some African countries. — File
Prices of moong and mash have risen in the international markets. Pakistan imports the two lentils from Brazil, Argentina, Burma, Thailand and some African countries. — File

KARACHI: Rupee’s appreciation against dollar to Rs162.80 from Rs167-168 — a gain of Rs4 — from July 1 till to date has not proved beneficial for consumers as stakeholders continued jacking up prices of edible products, two- and four-wheelers amid government’s failure to check prices.

Besides, consumers are yet to receive relief in prices of flour, sugar, onions and tomatoes despite rising wheat and sugar imports and arrival of vegetables from Iran and Afghanistan from the western border.

The government has said that wheat, wheat flour and sugar prices are likely to fall in the coming weeks. But so far, food inflation continues to remain at alarming levels as manufacturers and market players feel no fear in raising prices.

Sliding rupee against the greenback usually suggests low cost of imports of finished goods and raw material prices. Instead of any price fall, the wholesale and retail markets saw an upward trend in rates. Like past practice, market players take too much time in lowering rates especially when rupee overpowers dollar.

Prices of almost all pulses reached a new peak. One kilogram of good quality gram pulse carries a price tag of Rs180 after the staple’s wholesale prices crawled up to Rs125 from 115 per kg. Meanwhile, wholesale prices of mash pulses soared to Rs220 per kg from Rs180 while retailers are charging Rs260-280 as compared to Rs220-240.

Wholesale price of moong swelled to Rs220 from Rs180 per kg, making a case for retailers to demand Rs260-280 from consumers as compared to Rs220-230.

Wholesale masur prices rose to Rs140-145 from Rs125-135 per kg but retailers are demanding Rs160-180 as compared to Rs140.

Defending the price hike, Karachi Wholesalers Grocers Association Patron in Chief Anis Majeed said moong and mash prices had jumped in the world markets in the last one and a half months after increased buying from India. Moong is arriving from Brazil, Argentina and some African countries while maash is being imported from Burma and Thailand, he added.

Moreover, consumers have seen no relief in prices of sugar as well as the sweetener is selling at Rs95-100 per kg while wholesale rates remain unchanged at Rs92-93 despite arrival of imported sugar.

In addition, the arrival of large quantities of Ukrainian wheat has also failed to bring down prices of flour as the rate of 10kg and 5kg flour bags in the market is Rs700-720 and Rs350-360 respectively. The sellers are charging Rs75 per kg if customers demand loose flour in one kg bags.

The Trading Corporation of Pakistan (TCP) on Saturday said that the third vessel carrying 57,000 metric tonnes imported wheat arrived and berthed at the Karachi Port Trust. The TCP said that as per the allocation intimated by Ministry of National Food Security, the entire cargo of this vessel shall be handed over to Food Department, Government of Punjab directly from the Port. The total wheat imports have risen to 167,125 metric tonnes.

Moreover, around nine ships carrying 60,000 tonnes each of Ukraine wheat had reached the port from September to date while another four ships carrying Ukraine wheat and two ships carrying German wheat would arrive next month. All these quantities have been imported by the private sector, Cereal Association of Pakistan Chairman Muzammil Chappal said.

Around 80,000-90,000 tonnes of sugar from Dubai, Egypt and Saudi Arabia have reached Pakistan in the current month while another 60,000 tonnes would arrive more in the current month, he added.

Spice manufacturers have also wreaked havoc on consumers with prices. Retailers said the price of 400 gram red chilli pack is Rs540 against Rs280 while 200 gram costs Rs280-380 as against Rs140-190 per pack.

A spices dealer in Jodia Bazar said Dandicut Umerkot’s red chilli rates had surged to Rs750 per kg from Rs600-650 three months back due to crop damage by rains.

He said branded manufacturers are minting money especially on small packs by charging double the rate which is unjustified. He said manufacturers blend Indian and Khanpur red chilli instead of selling pure red chilli.

Meanwhile, price of Nido 910 gram pack is now Rs1,000 as compared to Rs950 while 900 gram pack of Everyday tea whitener is selling at Rs940 compared to Rs880.

The price of one litre tetra pack has risen to Rs155 as compared to Rs150 while 250ml pack is selling at Rs40 as compared to Rs38.

Automobiles prices have also gone through the roof. On October 13, the Indus Motor Company raised prices of all Toyota Yaris variants by Rs40,000 while Pak Suzuki Motor Company Limited increased prices by Rs35,000-42,000 on various models on October 15 amid claims of achieving higher localisation.

IMC spokesperson said that Yaris was launched at an introductory price earlier. “As per our strategy, we have kept it lower until certain volumes are sold,” he added.

Locally-assembled (Chinese and Japanese) two-wheelers (70cc to 150cc) became costlier by Rs1500-30,000 from July 1 till to date as assemblers in their notices to dealers continued to attribute high cost of imported raw material and parts following the rupee’s devaluation against dollar.

Meanwhile, prices of onion and tomato have remained pegged to their old levels of Rs80 per kg and Rs160-200 per kg despite imports of large quantities from Iran and Afghanistan.

Published in Dawn, October 18th, 2020


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