KARACHI, May 31: Consumers receive another pre-budget shock, this time from the cement makers, in the shape of price increase by Rs20 per 50 kg bag in just eight days.
Besides cement, the 16 kg ghee tins and some rice varieties have also come under pressure by touching new peaks just a week ahead of the new budget.
Consumers had already suffered from increase in prices of branded ghee and cooking oil tins, rice varieties, fresh, tetra and powdered milk in early May.
The 16 kg ghee tin price surged to Rs1,275 on Wednesday on the back of persistent increasing trend in palm olein prices in world markets. The tin was priced at Rs1,180 on May 1, and Rs1,030 on January 1, 2007.
The price of imported edible oil in the international market rose from $462 per ton in July 2006 to $805 in early May, 2007 and currently it stands at $875 per ton. The price hike was reflected in increase of sales tax and withholding tax on imported edible oils and the resultant increase in the prices of vegetable ghee and cooking oil in the local market.
Senior Vice-chairman Pakistan Vanaspati Manufacturers Association (PVMA), Abdul Waheed, told Dawn from Islamabad that in Punjab the 16 kg tin was selling at Rs1,325.
He said that the PVMA had informed the CBR and the industry ministry officials last week that the global price hike in edible oils had been playing havoc with prices in the local market.
The PVMA in its pre-budget proposal had said that due to the heavy increase in the prices of imported edible oils in the international market, the FED and sales tax on import of edible oil had increased to over Rs8,500 per ton in May against FED, sales tax of Rs5,100 per ton in July, 2006 and the withholding tax increased to over Rs2,000 in the current month against Rs1,250 per ton in July 2006.
The government is presently charging heavy amount of sales tax and withholding tax due to the price hike in the international market of edible oils at the cost of vegetable ghee industry as well as the general public.
There is an urgent need to rationalise the sales tax and withholding tax on imported edible oils to save the vegetable ghee industry as well as the general
public from further disaster, PVMA said. Prices of rice in the wholesale markets continued its upward journey. Super basmati prices rose to Rs48 per kg two days back from Rs44-45 per kg in the first week of May. Retailers are selling this variety not less than Rs65 per kg to the end users. On May 1, retailers were charging Rs55 per kg.
Basmati broken now sells at Rs32 as compared to Rs28 per kg on May 1. Rising exports of various varieties of rice can be blamed for pushing up the rates as the exporters are set to achieve a new record of fetching around $1.5 billion through rice shipments at the end of the current fiscal year.
Many market players said that the rising smuggling of rice to the neighbouring countries was also one of the reasons for the price flare up. However, the government is yet to take any action in protecting the interests of general public, who are now paying Rs15-20 per kg more to buy various rice varieties.
Convener Karachi Cement Dealers Association (KCDA), Shaukat Hussain, said that a week back cement makers had raised the prices by Rs10 per bag but they again increased the rate by Rs10 per bag in last two days.
Giving wholesale rates, he said Falcon cement is now priced at Rs255 while Lucky cement is available at Rs243, State cement at Rs240, Dadabhoy at Rs227 etc. Retailers charge extra Rs5 to Rs10 per 50 kg bag depending on the size of orders.
“Cement makers have finally given a gift to the consumers before the new budget and the government is watching the situation as a silent spectator,” he said.
He recalled that the cement manufacturers had increased the rates in April by Rs5 per 50 kg bag.
The Monopoly Control Authority (MCA), which has been tasked to probe into rising cement prices and cartels, has yet to come out with any stern action against the cement makers.
