KARACHI, June 4: In a pre-budget price hike shock to the consumers, the bread makers and a leading tea packer have raised prices unilaterally.

Some bread makers have sent a note to the retailers that the prices are being increased by Rs1- Rs4 depending on the weight of the bread and other related items. The new price is proposed to be effective from June 7, 2008.

A number of bread manufacturers, who are also flour millers, had increased the rates of bread from Re1 to Rs4 in the middle of December 2007.

Tapal Tea Private Limited (TTPL) has announced the new rates which became effective from June 1. Danedar 100 grams, 200 grams, 400 grams and 500 grams will now cost Rs37, Rs73, Rs144 and Rs345, respectively, as compared to Rs32, Rs63, Rs124 and Rs289 earlier.

The Tapal mixture 100 grams, 200 grams, 500 grams and 1,000 grams are now available at Rs35, Rs68, Rs160 and Rs310 as compared to Rs30, Rs59, Rs137 and Rs265, respectively. Once the price is increased by a company, the others follow suit.

Leading packers had increased the rate in February by Rs20-25 per kg owing to rising prices of tea in Kenya, low crop output and heavy buying by the European countries.

“The government should check the pre-budget price hike wave by the manufacturers,” general secretary Karachi Retail Grocers Group (KRGG), Farid Qureishi said.

General manager Tea and Blend, TTPL, Mohsin M. Saifi, said that the company had increased the price by Rs30-40 per kg. He linked the price hike of tea to devaluation of Pak rupee against the dollar coupled with imposition of 35 per cent LC margin on imports.

He said that the price of Kenyan tea has still not come since it went up in February this year to $2.9-3 per kg from $1.9-2 per kg.

Former chairman of Pakistan Flour Mills Association (PFMA) Shaikh Akhtar Hussain cited similar reasons prevailing during last December for the price hike like increase in the rate of raw material (wheat), utility bills and the distribution cost.

He said that the prices of bakery items had surged by at least 25 per cent since December 2007 but only six per cent impact had been passed on to the consumers by the bread makers.

“In case the situation remains the same the bread makers will further increase the rate by six per cent in August this year,” he added.

Mr. Akhtar hinted that the wheat price, which hovers between Rs2,150-2,200 currently, may come down after the free wheat movement is allowed between the provinces.

He, however, said that so far the notification for free wheat movement had not been issued.