KARACHI: The ghee and cooking oil industry has not passed on the impact of falling palm olein rates in the world market to local consumers, and during 2011 they further pushed up rates, linking the price hike to rupee devaluation and high cost of production.
According to a commodity round up prepared by the Pakistan Mercantile Exchange, palmolein rate dropped by more than 16 per cent in 2011 as against 42 per cent gain in 2010.
Domestic market of palmolein witnessed a downward trend in 2011. Its maximum price was Rs5,560 per 37.324 kg in February 2011 while its minimum price was recorded at Rs4,500 in October.
In 2011, local price of palm olein in the domestic market plunged by 11.59 per cent.
The local rate of five kg tin produced by a leading packer was Rs945 in January 2011 which rose to Rs995 in December 2011.
Similarly 2.5 kg ghee tin was priced at Rs475 in January 2011 as compared to current price of Rs497. The same price existed in cooking oil variety during 2011.
However, packers of 16 kg make changes almost daily keeping in view the fluctuation in palm olein rates in the world markets.
In January 2011, 16 kg ghee tin was available at Rs2,540 as compared to Rs2,450 in December 2011. Till today its rate is intact.
Former Chairman of Pakistan Vanaspati Manufacturers Association (PVMA) Abdul Majeed Haji Mohammad dispelled the impression that ghee and cooking oil industry had played a havoc with prices.
He said rising gas and power tariff, high cost of import due to rupee devaluation against the dollar, surging transportation charges on account of increase in diesel prices, wages hike, packaging cost, etc., have nullified the impact of drop in palm olein rates in world market.
One dollar was equal to Rs84.50 in January 2011 and it jumped to Rs86 in October 2011. Now it is quoted at Rs90.30.
He said the impact of continuous devaluation of the rupee against greenback in the last few months would make imported products costlier.
Irri 6: PMEX data says that in the domestic market a downward trend in prices has been witnessed in the last quarter of 2011.
The price movement remained in a bit wider band and the maximum price was Rs38.50 per kg in July 2011 while maximum price was quoted at Rs29 per kg on second last trading day of December 2011. A drop of 15.22 per cent was observed in Irri 6 in 2011. However, retailers are still charging Rs35-40 per kg depending on the areas.