LAHORE: In the absence of any effective check or control mechanism cartelisation, greed of retailers and storage capacity of hoarders have become powerful pricing determinant of most of the eatables in the Punjab.

The prices of eatables, like other items in the market, are determined by a simple supply/demand formula. The officials involved in regulating fruit, vegetables and grain markets say that all free markets, including food markets, equilibrate themselves. So, there is no need for interference.

But, in the absence of any proper regulatory authority and any other kind of check on unreasonable profits, it has become a free for all in Punjab food markets.

All 326 fruit and grains markets are run by the government-appointed administrators and the posts have become part of political wheeling dealing. The jurisdiction of market committees is based on municipal limits; Lahore is divided into four municipal areas and has four market committees. Members of these committees cover the entire area under their jurisdiction reportedly to fleece money on all fruits, vegetables and food transactions.

The financial power, or political backing of these administrators, could be gauged from the fact that one such administrator in Narowal sold off his own government office to a relative and then got its back on hefty rent. Both gentlemen are currently facing an inquiry.

With such an immense power over markets, the posts serve more as money minting machines rather than regulatory bodies.

The other official check on the undue pricing used to be district magistrates. The post was abolished by much-trumpeted devolution plan, and was not replaced by anything for the next four years. A trio of hoarders, import mafia and retailers had a field day during these four years, obviously at the cost of common consumers.

In February last year, the government created consumer courts. The level of their efficiency is reflected in the fact that Lahore chapter of the court took up its first case on April 30, 2007. With these kinds of official checks on pricing and unreasonable profits, one can imagine who rules these markets.

The government's failure to manage supply chain, partly due to weather vagaries and in spite of free-for-all imports, has only emboldened the hoarders and profiteers. The imports only worked when they were massive enough to outrun storage capacity of hoarders.

The sugar pricing best illustrates the failure of the government’s so-called free market mechanism. The millers hoarded the domestic production two years ago, released their stocks slowly and almost doubled the domestic price, making windfall of Rs74 billion within a year.

A panicked government ordered immediate import of cheap foreign sugar, which imported at 40 per cent of local price. But the mafia kept hoarding even imported sugar and kept a tab on release and domestic price. The imported cheap sugar (Rs17 per kg) was sold in the domestic at Rs40 per kg. They kept doing so till the government flooded the domestic market and hoarders could store no more.

This policy failure has been in addition to inflationary trend that has increased prices by 10 per cent every year during the last few years.

labour and transportation cost: "A truck-load of apples used to arrive in Lahore from Quetta at Rs6,000 till year 2,000," says Muhammad Basharat of Lahore. Now it costs us Rs24,000. This four times increase would naturally reflect in final price.

Labour charges (loading, unloading) have also tripled during the last six years. Cold storage charges have gone up in direct proportion to electricity charges, which do not seem to stop anywhere. All factors raise the prices. Since there is no halt in rise of these charges, prices also rise correspondingly.

"Retailer now charge prices as per their financial requirements to run their family rather than in proportion to their investment," says Muhammad Asif, a retailer at Walton Road.