Devaluation of rupee against dollar and escalating transportation charges trigger rise in grocery prices

Devaluation of rupee against dollar and escalating transportation charges trigger rise in grocery prices

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KARACHI: Consistent devaluation of Pakistani rupee against the dollar and rising transportation charges have started making a contrary impact on the prices of vital items.

The wholesale market commenced after Eid holidays with an average leap of Rs5 per kg in the rates of pulses.

A wholesaler of pulses in Jodia Bazaar said the price of imported pulses, including gram pulse and masoor, had come under immense pressure.

For example, gram pulse rate rose to Rs90-95 from Rs85-90 per kg while masoor price surged to Rs64 from Rs60 while another quality climbed to Rs68 from Rs64 per kg.

Maash price uplifted to Rs80 from Rs75 per kg.

Karachi Wholesalers Grocers Association (KWGA) chairman Anis Majeed attributed the price jump to at least five per cent loss in the value of the rupee against the greenback in the caretaker set-up.

He anticipated more price shock as transporters have also started pushing up fares owing to diesel price hike to Rs105.81 from Rs98.76 per liter from June 12.

Importers of pulses have already slowed down imports as Pakistan faces a glut-like situation owing to thin demand and depressed rates.

Import of pulses dropped to 622,659 tons ($483 million) in July-May 2017-2018 as against 1.170m tons ($903m) in same period last fiscal.

Pakistan Vanaspati Manufacturers Association’s (PVMA) former chairman Sheikh Amjad Rasheed calculated Rs6 per kg/liter extra on ghee and cooking oil price in the wake of recent rupee devaluation and rising transportation cost.

He said the manufacturers would try to gradually elevate price instead of giving a sudden uncalled shock to the consumer market. Besides, the manufacturers would also wait for clearance of old stocks from the markets.

The PVMA has intimated its members for paying transportation charges for their edible oil consignments to NLC and private tankers with an increase of only 4.91pc of the existing rates from June 12, 2018 on account of Rs6.55 per liter rise in diesel price.

In case of tea, declining value of the rupee has offset the falling price of black tea in Kenya.

Pakistan Tea Association (PTA) chairman Khalid Puri said the price of Kenyan tea had declined by Rs80-100 per kg in the last two months owing to better crop but it was invalidated by the rupee depreciation which pushed up cost of import.

Besides, the government in the 2018-2019 budget also imposed an additional 1%  duty on import of tea.

However, some tea packers offered some quantity increase in various packets under Ramazan package.

He said packed Kenyan tea sells at Rs800 per kg while loose is available at Rs600 per kg.

“I cannot predict about future price of black tea as much will depend on Kenyan tea prices and rupee-dollar parity,” he said, adding if Kenyan tea price goes up then the local price will rise.

Pakistan’s tea imports fell to 174,968 tons costing $524m in July-May 2017-2018 versus 183,791 tons ($491m) in same period last fiscal.

Jodia Bazaar Traders Association president Jaffer Kudia expects Rs50-100 per kg rise in price of imported spices followed by hike of Rs250-300 per kg in imported dried fruits depending on the valuation rates and world market prices.

According to Pakistan Bureau of Statistics (PBS), import of dried fruits and nuts plunged to 70,499 tons ($98m) in July-May 2017-2018 from 139,116 tons ($165m) in same period last fiscal.

Imports of spices rose to 128,110 tons ($153m) in the last 11 months of current fiscal year as compared to 109,814 tons ($128m) in same period last fiscal.

The import bill of milk cream and milk food import stood at $251m (84,268 tons) which was $234m (80,007 tons) in July-May 2016-2017.

Pakistan’s total import bill of food group inched up by one per cent to $5.715bn in 11 months of the current fiscal year as compared to $5.656bn in corresponding period of 2016-2017.

Karachi Retail Grocers Group general secretary Mohammad Farid Qureshi said so far, the local and foreign companies have not informed shopkeepers about any rise in retail price of various products.

“Dual impact of rupee depreciation and higher transportation charges on commodity prices will be visible in the next one to two weeks in retail markets,” he added.

 

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