Prices of ghee, oil decline
The prices of ghee and cooking oil in the local market have fallen after palm olien rates declined in international market. However, the producers of branded ghee and oil have not reduced their rates.
The price of 16 kg ghee and cooking oil tin plunged to Rs1,950 from Rs2,100 in Punjab two weeks ago.
In Karachi, the rate of 16 kg ghee tin is quoted at Rs1,820 as compared to Rs1,900 on Tuesday.
The palm olien rate fell to $1,000 per ton from $1,200 two weeks back.
Its price in local market also dropped to Rs3,850 per maund (37.25 kg) from Rs4,200 in the last two weeks.
The branded ghee and cooking oil producers also did not pass the impact of the falling palm olien prices in the world market to consumers in March this year.
The Pakistan Vanaspati Manufacturers Association (PVMA) chairman Abdul Wahid told Dawn from Islamabad that the falling crude oil prices had made an impact on various commodities, including palm olien.
He said the 16 kg tin’s rate fluctuates almost on daily basis keeping in view the palm olien rates in Malaysia and Indonesia.
When asked as to why the branded ghee and cooking oil producers, who are also PVMA members, have been reluctant in cutting the rates, he said that being the chairman he urged them to follow suit but so far there had been no response.
He was of the view that the branded product producers might come out with some discount schemes in Ramazan to show their sympathy with the consumers.
According to Mr. Wahid Pakistan consumes 3.2 million tons of ghee and cooking oil per annum, in which the share of oil ranges between 35-40 per cent while ghee holds the share between 65-70 per cent.
He said that the government was still pocketing Rs30 per kg in terms of taxes and duties.
A leading branded product producer ruled out any decline in the prices of 2.5 to 5 litre/kg tins in the coming days by saying that the falling rupee value against the dollar, one per cent raise in GST and income tax, 30 per cent rise in gas prices, higher wages and transportation cost on inflating petroleum prices have nullified the impact of declining palm olien rate on the local rates.
Branded ghee and cooking oil prices have surged substantially in the last two years. In Sept 2006, five kg Dalda ghee tin was priced at Rs395 while it is now quoted at Rs775.
He said as a result of the rising price of 2.5 and 5 kg/litre tins, the market share of one kg pouch, which was five to 10 per cent a year ago, has surged to 30 per cent as consumers prefer to buy smaller quantity as per their requirement.
The packer said that if the palm olien rate would have not fallen then the local rates would have surged by Rs10-15 per kg.
He said that the workers in the factories had been demanding increase in wages after persistent increase in prices of essential items and higher utility, petrol and diesel rates.
Surprisingly, the government had not asked the branded packers as to why the rates had not been brought down despite a cut in palm oil rates in March and in the last two weeks.
A PVMA member said that there was a need to cut the sales tax and import duty on palm oil so that consumers could get an immediate relief. A sizable quantity of palm olien has been arriving from Malaysia following a 10 per cent duty cut on its imports from Jan 1, 2008, under the Free Trade Agreement (FTA) with Malaysia. However, its impact on the price was just Re1 per kg.
Palm oil imports in 2007-08 surged by 3.28 per cent in quantity and 76 per cent in value to 1,766,471 tons ($1.6 billion) as compared to 1,710,437 tons ($916 million) in 2006-07.
According to figures of Federal Bureau of Statistics (FBS), soyabean oil imports also rose by 123 per cent in quantity and 154 per cent in value to 108,382 tons ($103 million) in 2007-08 as compared to 48,492 tons ($140 million) in 2006-07.
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