KARACHI, June 18: The measures announced in the budget 2007-08 to bring prices of essential commodities down from their peaks have failed to make any significant difference, while rates of various other commodities continue their upward march in post-budget trading.
It is surprising that despite bumper wheat crop this year the prices of the commodity are crawling up in the market. However, the government has not offered any subsidy on wheat flour prices in the budget.
The one per cent relief in withholding tax from three per cent to two per cent on import of edible oil makes a meager impact of 70 paisa per kg in loose ghee and cooking oil rates.
While various varieties of imported papers have already become costlier by seven to eight per cent due to increase in sales tax by five per cent and one per cent surcharge on imports will further push up prices of copies and books ahead of new academic season and packaging materials as well.
The price of steel bars has also gone up to Rs46,000-47,000 from Rs42,000 per ton due to increase in sales tax to 20 per cent on raw materials of iron and steel. Besides, other steel related items have also seen increase in the rates.
Tea importers expressed their displeasure over not offering them any relief in the budget and said that the one per cent import surcharge would make imports more expensive.
General Secretary Karachi Retail Grocers Group (KRGG) Farid Qureishi told Dawn that the market had not seen any big impact of budgetary relief measures. The 16-kg ghee tin which was selling at Rs1,325 prior fell to Rs1,200 after the budget announcement, but again went up to Rs1,280.
He said the wheat price however surged to Rs1,200-1,210 per 100-kg bag from Rs1,180 prior to the budget. However, flour prices of various varieties were stable between Rs15 to Rs18 per kg.
Chairman Sindh Circle Pakistan Flour Mills Association (PFMA) Ansar Jawed talking to Dawn said the surge in wheat prices was the result of massive hoarding of the commodity by the cotton ginners and rice millers who had taken money from the banks for procuring wheat for making profit in off season.
He said that the State Bank should direct banks to stop extending money to ginners and millers who had actively been investing in wheat hoarding.
Chairman Pakistan Vanaspati Manufacturers Association Shaikh Amjad Rashid said that the 70 paisa per kg decline could not be termed as a big relief for the consumers.
He said that the government had been providing relief at utility stores instead of taking such measures to make the ghee and cooling oil cheaper in the open market. “Utility stores sell only 8,000 tons a month which comes only four per cent of the total monthly edible oil consumption of 125,000 tons,” he added.
He said that PVMA members had raised the issue of monopolising some ghee makers by the Utility Stores Corporation (USC) with CBR Chairman Abdullah Yousuf on June 14 who assured that procurement of ghee and cooking oil by the USC would be made transparent.
The government had also not withdrawn 0.5 per cent warehousing surcharge on imported edible oil in the new budget. The CBR chairman had instructed the concerned officials to look into the matter, the PVMA chief said.
He added that the CBR chief had also assured that he would look into the matters regarding the enhancement of sales tax on imported tin plate from 15 to 20pc in the budget and receiving of low duty drawback and sales tax refunds on export of ghee and cooking oil to Afghanistan.
Chairman All Pakistan Paper Merchants Association (APPMA) Shaikh Ziauddin said that the increase in sales tax rates followed by one per cent surcharge on imports had caused price hike in Duplex board (used in copy cover and packaging) to Rs52 per kg from Rs48 followed by increase in offset paper and offset printing paper to Rs83 and Rs78 from Rs77 and Rs73 per kg, respectively.
He said that the price of photo copy paper (500 sheets packet of A4 size) had increased to Rs204-205 from Rs198. Price of bleach board (used in manufacturing of pharma products) had risen to Rs82 from Rs77 per kg.
Chairman Pakistan Tea Association (PTA) Hamid S. Khawaja said that no concrete measures were announced in the budget to check smuggling of tea.
He said legal import of tea in May stood at 6.89 million kg which included imports by Unilever and Tapal, whereas imports under Afghan Transit Trade were averaging 7.1 million kg from Kenya only which means that smuggling was thriving through the ATT.