KARACHI, Nov 5: Multinational companies are considering price cuts in consumer items ahead of Ramazan in view of over five per cent rupee appreciation against the dollar, making imports of raw material cheaper despite war risk levy by foreign shipping lines.

But importers rule out any substantial price cut prior to Ramazan. However, they assure that “there will definitely be no increase in prices.”

An official in Lever Brothers told Dawn that the company is considering cut in tea prices. “I cannot give the actual percentage but it may be around Rs2 per tea pack,” he said. Other companies may also follow the suit.

Ghee and cooking oil producing companies are also reviewing the possibilities of slashing prices by Rs 10-30 per tin.

To cope up with huge demand of ghee and cooking oil, importers bought 97,348 tons of palm oil in October as compared to 43,000 tons in September, up by 54 per cent. Palm oil is the main raw material for ghee and cooking oil production.

A total of 42,000 tons of edible oil will further arrive in the current month, while 76,050 tons in six vessels are already at the high seas. Three vessels are currently loading 50,750 tons of palm oil in Malaysia, an importer said.

Representatives of retailers, wholesalers, MNCs officials and importers will review the stock and price situation on November 10 with district government officials to finalize the new price list for Ramazan.

Importers and wholesalers have ruled out any price spiral ahead of Ramazan on account of over five per cent rupee appreciation since September 11. Further, the dollar has lost its value against the rupee by eight per cent in the kerb market.

Price flare-ups and hoarding by stockists have been a ritual prior to Ramazan but this time market sentiments seem a bit different due to post-September 11 developments.

“We cannot promise price cuts right now but there seems no clear signs of any price spiral,” Chairman Karachi Wholesale Grocers Group (KWGG), Anis Majeed said adding prices could have come down due to dollar depreciation but war risk levy had nullified the full benefit of cheaper imports.

The markets were actually expecting price surge in view of more buying from consumers in the backdrop of September 11 incidents followed by attacks on Afghanistan, but so far nothing has happened, thus keeping both stocks as well as prices intact.

“Stock position is sufficient to cover the demand in Ramazan. There is no shortage of any commodity in the market,” he said. A spokesman of Karachi Retail Grocers Group (KRGG) also shared the same view.

Anis said that much now depends on the rupee-dollar parity. So far it has been in favour of importers, making imported goods cheaper. In case dollar gains its strength, then imports will become costlier.

Importers and MNCs are still looking forward to complete withdrawal of war risk surcharge despite a 20 per cent cut by 14 shipping lines under India Pakistan, Bangladesh and Ceylon Conferences (IPBCC) a few days back.

To further settle the issue, the chairman, Ad Hoc Committee of the KCCI, A.Q. Khalil met Lt Gen (R) Jawed Ashraf, Minister for Communication. The minister informed the KCCI body chief that he had discussed the matter with the commerce minister, and appropriate measures were being taken to get the levy withdrawn.

Javed said the government could consider the possibility of invoking sovereign guarantee to save interest of the importers and exporters. On additional charges recovered by shipping lines, he said a meeting of the Shipping Rates Advisory Board would be held soon to sort out the issue.