Curious case of wholesale fruit prices drop in Punjab

Published May 2, 2021
The wholesalers are reporting around 40 per cent drop in sales in Punjab, with truckloads of fruit waiting for days in markets before finding a buyer. — Reuters/File
The wholesalers are reporting around 40 per cent drop in sales in Punjab, with truckloads of fruit waiting for days in markets before finding a buyer. — Reuters/File

LAHORE: Pakistan’s fruit market is tailspinning into chaos. The wholesalers are reporting around 40 per cent drop in sales in Punjab, with truckloads of fruit waiting for days in markets before finding a buyer – mostly at a price far less than farmers and wholesalers’ calculations.

There has been no price panic typical of the holy month; conversely, for the first time in last many years, prices of a number of fruits (melon, strawberry) are dropping, at least at wholesale level.

Farmers report failure of their Ramazan planning. Helped by relatively cooler weather this year so far, they claimed to have delayed processes of fruit maturity and picking to benefit from Ramazan price boom. It not only improved supplies but the list of variety also expanded.

On the one hand thus, supplies improved but sales dropped on the other hand. So, farmers are not getting what they had planned and hoped for this Ramazan.

Retailers still fleecing consumers in holy month

The only happy segment of current situation is retailers. Prices at the retail level are still high, causing major drop in sales and rigging the entire market. The retailers are thus making money at the cost of farmers and the wholesalers and may leave lingering impact on the fruit market, which would outlast the current season.

The Pakistan Bureau of Statistics in its inflation monitor for April released on Saturday also reported that fruit prices soared by 22pc in the month.

All three players of the fruit market mainly blame Covid crisis for the situation. “There are certainly some factors like general high inflation and rising poverty as well,” says Khalil Bhatti – an importer and wholesaler at Lahore’s main fruit market. These trends have always been there and had been chipping away part of market every year, but never caused a major dent to the proportion of current one.

“Covid and its resultant job losses and poverty have played havoc with the fruit market,” claims Bhatti, adding “we, the wholesaler assess the market situation on factors ie time lag between arrival of fruit and its sale and the price it sells at. Time lag has increased many times over and price dipped substantially. Truckloads of fruit can be seen waiting for days before auctioned and at a price far less than our calculations.”

On Friday, the wholesale price of watermelon was around Rs25 per kg, against Rs60 at the retail, even more in some parts. Melon had the same pattern: Rs20 at wholesale and Rs50 to Rs60 at retail. Banana, which, on average, cost Rs100 per dozen, was over Rs200 at the retail stage.

“Yes, Covid has certainly played its role,” thinks Muhammad Saleem – fruit farmer from the Lahore conurbations – “but there are other factors too. Of late, the farmers, with better price experience in the holy month of Ramazan, had developed a consciousness for the month and planned harvesting better profits. Their planning not only improved supply during the month but increased options as well; like, there was no guava available last Ramazan. It is there this year. Peaches used to come from Khyber Paktunkhwa alone.

But farmers from Punjab are now expanding on its orchards and harvest from Punjab is already there in the market. A totally new variety of melon has also arrived in the market. So, both supplies and varieties have improved and testing peoples’ buying power, which is on the decline for many reasons.

However, both wholesalers and farmers think that retailers were making money at their cost and not letting the benefit of price reduction pass on to common man. This, they blame at what they call the failure of governance, stressing the need to connect both in a better way. Tauqeer Akbar, former secretary of the Lahore Market Committee, explains the missing link and causes of exploitation at the retail level.

“The chaos at the retail level is total because all vendors are work and sell outside the system. They are neither registered with market committees nor with city government; they operate in a legal grey area, where exploitation is easier and incentivised as well. Since there is no legal cover for them, they are totally dependent upon the goodwill of police, local administration and anyone with wherewithal for exploitation. They pay them all and transfer this cost of bribe on to the produce. These costs are in addition to exorbitant profits, they make.

Since there is no check, they sell produce to harvest profit of their own choice, rather than return on their investment. This grey area has been haunting consumers and will continue doing so as long the government, both provincial and local, bring them under discipline by registering them and allocating places.”

Baba Shafi, an old vendor on the Lahore canal, who has been selling fruit for the last many decades, has his own woes to narrate: “If I make say Rs5,000 on a particular spot due to better location or easy approach, there is no guarantee I will get the same spot next day – unless I correspondingly increase grease for many waiting palms. We would love to have a system: register us, allocate spots, monitor our behaviour, charge us and deregister the guilty ones. It is not to justify wrongdoing if any, but to underline the problems we suffer at the retail level. This legal vacuum does not suit any one, but to those making money out of it.”

Fear longer impacts of the current sale drop, Dr Iqrar A Khan, ex- vice-chancellor of the University of Agriculture, Faisalabad, says that it may hit fruits that are planned and sown every year (like the melon family) and increase their price next year. Rest of the supplies, which come from orchards, will not suffer. However, investment on them would certainly decline as farmers suffer income loss.

Published in Dawn, May 2nd, 2021



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