KARACHI, OCT 18: The 3.2 per cent gain that the rupee has made against the dollar since September 11 has offset the impact of war risk surcharge of $7 dollars per ton on imported items thus keeping the prices intact.

The levy of war risk surcharge has raised the landed cost of imported food items by at least two per cent but the rising value of the rupee against the greenback has compensated its negative impact of $150 per container of 20 feet.

A spokesman for Karachi Wholesale Grocers Group (KWGG) told Dawn on Thursday that the prices of imported items had not moved sharply in the markets as the rupee’s strength made the imports cheaper and totally nullified the impact of war risk surcharge.

For instance, he said, that the landed cost of pulses had surged by 50 paisa per kg or Rs500 per ton, but the increase had not been passed on to the consumers as the impact had been eaten up by a stronger rupee making imports cheaper.

However, market sources said that importers and wholesalers could not pass on the impact of war risk surcharge on the current prices because the rupee had gained 3.2 per cent against the greenback since September 11 and the impact of war risk is two per cent, leaving still a difference of 1.2 per cent.

They said it was to be seen that how long the rupee could maintain its strength against the dollar, as a low-priced dollar would give a crippling blow to our exports. They fear that in case dollar gains, the imports will again become costlier and then the market will see the impact of war risk surcharge in shape of price spirals.

They urged the government to hold meetings with foreign shipping lines as any price hike in commodities would not be feasible for the end-users specially in Ramazan, starting exactly after a month.

Consumption of gram pulse, black gram and white peas rises in Ramazan. Importers say that the market situation is quite normal these days but in case a civil situation gets deteriorated, then the prices will go up.

Import of food group including milk powder, tea, pulses, edible oil, spices and sugar, have declined in September 2001 by 21 per cent in terms of value as compared to August. But importers and wholesalers said that they had enough stocks to handle any crisis like situation.

Chairman Milk Powder Importers Committee of Pakistan Commodity Traders Association (PCTA), Rahim Janoo also confirmed that no price increase had taken place.

He said wholesalers were not lifting the items from the market due to poor demand of almost every item and falling buying power of consumers. Even a large number of Jodia Bazar importers have either slowed down opening new letters of credit( LCs) or stopped making fresh commitments.

He said many items were now selling below cost these days. Only some buying activity could be seen in khopra (coconut) as its demand soars in Ramazan as well as in Shaba-e-Barat. Otherwise, price of milk powder, tea and spices are pegged to their old rates.