Prices of foodstuff set to increase

KARACHI: Market traders have calculated at least five to 15 per cent impact on imported essential food items following the increase in prices of petroleum products and persistent devaluation of rupee against the dollar since PML-N government took control from June 6, 2013.

Over the past three months, oil prices have already been revised upward thrice.

Commodity dealers said that the impact of devaluation and rising transportation cost in some items has already been passed onto consumers depending on demand and supply situation. When Nawaz Sharif took charge, diesel was available at Rs105.7 per litre as compared to its current price of Rs116.95 per litre. Overall petroleum products prices were raised by 10-15pc from June onwards.

Chairman, Karachi Wholesalers Grocers Association (KWGA), Anis Majeed, said that many traders of goods have already become cautious in placing orders for imported goods due to uncertain rupee-dollar parity situation, making imports costlier. One dollar was available at Rs98 on June 6 as compared to current rate of Rs106 in inter-bank market.

Based on demand and supply of goods and changes in the world market prices, import of various items falling under food group plunged by 20pc to $653 million in July-August 2013 as compared to $820m in the same period 2012.

According to figures of Federal Bureau of Stastistics (FBS), import of pulses and milk cream/milk for infants dropped by 40 and 45pc followed by 20pc and 23pc fall in palm oil/soyabean oil and spices.

Tea imports slightly went up by 3pc.

However, he said that the price of various commodities had dropped in world markets but devaluation and rising transportation cost are nullifying the impact to the end users.

India has also devalued its rupee making importers of goods nervous and they have also lowered their future import plans.

One of the reasons of drop in world commodities prices was thin orders from Indian importers, Anis Majeed said.

He urged the State Bank of Pakistan to take more steps to rescue rupee falling.

Commodity importer and former KCCI president Haroon Agar, analysing the impact of devaluation on commodity price from June 6 till to-date said the loss of 8pc rupee value and increase in POL rates caused Rs7 to Rs7.50 per kg impact on imported pulses followed by Rs13 per kg in various brands of imported milk arriving from US, France and Germany.

In spices, he said devaluation made an impact of Rs60-70 per kg as a majority of spices are being imported.

President, Falahi Anjuman Wholesale Vegetable Market Super Highway, Haji Shahjehan, said consumers paid at least Rs10-15 per kg more for greens since June due to rising production cost on account of increasing transportation charges.

Rupee devaluation, he added, had jacked up prices of imported items, like ginger, garlic and tomato.

Currently, all vegetables rates have been high for the last few months. Vegetable prices, especially those which enjoy good demand like onion, tomato, may come under pressure as goods transporters would prefer loading sacrificial animals from up-country rather than vegetables.